Chapter 3: Constitution of Trusts Flashcards
(24 cards)
When is a trust automatically completely constituted
settlor choose to act as a trustee
when must the settlor transfer property?
Chooses to appoint another trustee
what does vest mean?
transfer legal title using proper formalities.
who is a volunteer in a trust?
beneficiaries who have not provided consideration for the trust
what legal rights do volunteers have to property?
NONE - cannot rely on the court to enforce an incompletely constituted trust to obtain property
what legal remedy does a beneficiary who has given consideration have
can rely on the court’s help to enforce the trust e.g grant order/ specific performance
what does a beneficiary not have to prove?
they have given consideration to have entitlement
what is often mistaken for complete constitution of a trust?
execution of trust deed
how is land vested?
by deed (written, clearly a deed, signed by parties, witnessed).
how are shares vested?
stock transfer form
how are chattels vested?
physical delivery (unequivocal) or deed
how are equitable interests vested?
formalities in S531(c) (subsisting equitable interest/ written/ signed)
how are choses in action vested?
written notice to debtor
how are cheques vested
cannot be payee account only
endorsed / signed on the back.
who cannot enforce the gift/ trust?
the volunteer of an imperfect gift (not legally transferred) and the volunteer of an incompletely constituted trust
what is a covenant?
a promise made by deed
transfer property to beneficiaries at a later date
what is a covenant to settle?
a promise to place property on trust
what is settlement
interchangeable with ‘trust’
settle property = to place property on trust.
what is an exception to enforcing a covenant to settle?
beneficiaries who have given marriage consideration
what is marriage settlement?
a trust established on marriage
who are the beneficiaries to marriage settlement?
The parties who provided marriage consideration (bride/ groom) and children
when do beneficiaries become parties to the covenant?
signed the deed containing the covenant
what legal remedy is available to a beneficiary who is party to the covenant?
sue for breach of covenant / failure to act
claim damages
can trustees sue on behalf of beneficiaries?
trustees cannot be forced to sue on behalf of beneficiaries.
