Equity and trusts - formalities Flashcards Preview

From Flashcardlet- Equity > Equity and trusts - formalities > Flashcards

Flashcards in Equity and trusts - formalities Deck (72):
1

What about formalities?

Hard area- but if understand issues = can do very well

2

What can make you do bad with formalities?

Can do bad if do not understand link btw formalities and conditions

3

What do formalities deal with?

Deals with how a trust is created in property, creating eq interest

4

When we talk about form =

Requirement of writing

5

Next challenge to establish trust after 3 cert

Formalities

6

Formalities necc create ?

Testamentory trust (made by a will) & inter vivid

7

What do formalities depend on

Diff formalities depending on type of prop

8

Intro- a person who wishes to create trust must look at?

Must look at formality req imposed by statute

9

There are diff requirements for what ?

Interviews trusts
Testamentry trusts

10

What are intervibos trusts

Trusts set up during a settlors life time - set out on face of will (trust)

11

What are testamentry trusts

Set up by testator will which comes into effect on the testator death once probate = granted which is backdated to time of ts death

12

Types of trust prop dealing with?

Trust of personalty

Trust of land

Disposition of an equitable interest

13

What is need for formalities

2 create certainty of transactions and prevent fraud

Need to be clear from outset who has benefit of an equitable interest

Certainty created by formalizes has advantages for several parties

14

In regards to several parties what about trustee

Trustee - need to be certain who benefited are

Trustees have duties and powers in relation tot he trust property

If these powers and duties are performed incorrectly trustee may be held personally liable for breach

15

In regards to several parties- for beneficiary ?

Additionally Ben must be certain his / her actual interest in prop. This will prevent fraud by the trustee

The clearer the allocation of prop rights, the easier for trustee, beneficiary and ultimately CT’s to allocate the correct interest to parties

16

In regards to several parties- for the CT’s?

Certain circum CT’s may need to intervene with trust

Eg in its variation or excercise of powers

The ct will need to ensure it acts correctly in relation to competing interests

17

Several parties - for revenue and customs?

Needs to be clear for the purpose of tax

The trustee would hold the legal title and would appear to be the person who should pay tax any income the test produces.

Rev and customs will seek to recover tax due which is why so many cases involve hm revenue and customs commission - emeeey irc ??

18

What about trusts of personalty ?

Where in inter vivid one of personal prop sets out to .. a trust of such prop - not obliged to comply with any form of req - Come back to

19

Info to types of trust - testamentry trusts?

Many trusts created by will. A few of all wills is that they must comply with req of wills act 1837 to be valid- s.9 states:

20

What does s.9 state?

In writing

Signed by the testor or someone acting At the testator direction in his or her presence : and

In the presence of 2 witnesses who sign and attest the will in test sites presence

21

Reason for these requirements is bc?

Req writing helps this and CT’s will not allow it to be used as an.. of fraud - rouchefaul boosted

- 2 prevent fraud and corcion

- all test docs must comply as must any amendments by codicil. These req will satisfy any need for the evidence of transfer of equit interests or the creation of trusts -

The main purpose of s.53 1 b lap in evidential & wills aft 1837 req satisfy this

22

Creation of intervivos trust in prop other than land?

The creation of this = no formalities - requires none - other than 3 certainties for the creation of trust

23

Applies to which prop

Apply to prop eg shares. Money paintings - most important thing that must be established in cert of intention to create a trust- this is q of fact - must be esrav in case by case basis

24

Certainty of intention can be determined by ?

Words , written statements or conduct - Paul v Constance - in established cert if I , ct look whole sit

25

Hw if CT’s fail to look suff cert required for trust -

The y? Will not Josie a trust to achieve justice - Jones v locke

This is clear e.g of maxims that equity will not perfect on imperfect gift & equity will not assist a volunteer

26

What should you remember?

Creating a trust is cruel kindness - as it creates overseas obligations for trustee

CT’s are happy to create a trust an informal statements but these must be clear that this is the intention of the settlor

27

Back 2 trusts of personalty what can they be created

Can be created orally- Paul v Constance = money in bank account

28

General rule trust is personalty

No need writing - no form req

29

Req of writing dependant on?

Subject matter of trus t

30

What in regards to trust of land?

Creation of intervibos interest trust of an interest in land

31

Where subject matter land?

Must be evidenced in writing - signed by person declaring at time

Been the case since - stat of frauds 1677

32

Trust of land can be

Declared orally or in writing but until it is in writing = unenforceable

33

What about land

Land always treated differently - perosjnofnorop intr no form just 3 certain items whereas need writing

34

What is the rule now set out in

S.53 1 b lap

35

Quote a.53 lpa

A decl of trust respecting land must be mandifest and proved by some writing signed by some person able to declare the trust

36

2 formalities must be satisfied here

1 must be evidenced in writing

2 evidence must be signed by settlor

37

What will be the interests affected?

Applies to freehold , leasehold and eq interest in land - look dealing with eq interest

38

What should we note here:

S.53 1b only deals with creation of trust over an int in land not transfer of legal title and only deals with creation - land nothing else!

39

What is meant by evidenced in writing?

So if have trust of land = enforceable cod ev in writing - able to sue and enforce in any shape / fashion but must satisfy 2 req

40

While valid trust?

Come into exist once declared until 2 req satisif = not enforceable

41

Valid momen de suff cert =

Important tax implications for settlor and Ben claimant

42

What does this also mean?

Once trustee excercise his her proves under trusts he / she will not breach

43

Although valid not enforceable ?

Ben can not enforce trust ie using his : her powers to vary trust = gap btw validity and enforceability

44

Evidence when written-?

Must contain all relevant terms of trust = 3 cert

45

Writing extras?

Does not need to be form of deed

Written evidence signed by settlor = suffice

Can be better / other informal doc

Written and signed evi can be produced at later date - gardener v rowe

46

Point to notes about s.53 1b

1- 3 cert
2 - actual deck need to be in writing
A doc acknowledging a prior oral decl will suffice -

Oral - trust but no enforceable

47

Cases for no. 2?

Foster v Gael - childes v childes- McBlain v cross

Doesn’t say deed I writing just must be evidenced in writing

48

Also with no. 2

Doc must show that trust was intended but need not contain all terms - re Tyler’s trust fund

49

Doc must be signed by the person able to

Declare the trust (land owner) on agents signature will not suffice - re north cliffe

( must be actual owner not agents signature)

50

What does this mean

Matter of construction -

Hw if settlor declares himself trustee of an interest in land for a beneficiary, remember that the settlor will only have to declare trusts of land and complete required formalities of a.53 1b lpa- as settlor as trustee a tleast has legal title to the land- connected to consitituin

51

Extra marks for exam?

Exam may create trust - by email/ text . This is to stimulate discussion on the need to have decl signed . No need to conclude in this but make reason any if it would satisfy req - perhaps compare with e conceyancing of land

52

Requirement of writing was introduced to prevent fraud

Rouchedaul v vousread

Form play important role in tracking the conduct of ownership of prop - CT’s extemelt rekebant to allow required form to be avoid

53

What is this case?

This case is an exception

If settlor transferred legal title to trustee - understanding to be held on trust but failed to evidence in writing - CT’s will consider enforceable

So if writing fraud make unconditionally result - exception

Comes back

54

Beneficiaries disposing of equitable interests under trusts?- what is the next rule of formaility?

Next rule of formality we need to consider is differnet tule and it’s the idea of disposal of eq interests under trusts, or the disposition of eq interest under trust.

55

now hear what do we have?

Now here we have a rule s.53 1 c of lpa which well look at in a moment but before we do that heres is recap

56

What do we mean b y disposal of eq interest-

firs point remeber that an equitable property interest in the same way as lad is. It is intangible forming a chose in action, but neverthless capable of being treated in same manner as all prop. It can be mortgaged, sold, and transferred if you bear this in mind, can grasp topic easily


57

The owner of an equitable interest in property may confer the benefit of the interest on another person by:
?

The owner of an equitable interest in property may confer the benefit of the interest on another person by:

(i) assigning the interest directly to a third party;
(ii) directing the trustees to hold the property in trust for a third party;
(iii) contracting for valuable consideration to assign the interest to another;
(iv) by declaring himself to be a trustee for another.

58

case for this?

Timpson’s Executors v Yerbury [1936] per Romer L.J
-identified four ways to benefit another person with beneficial interest?

59

S.53(1)(c) LPA?

S.53(1)(c) declares that a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same or by his agent thereunto lawfully authorised in writing.

60

what does S.53(1)(c) LPA give us?

genral fairly strict rule of formality , certaintly in relation to eq interest under express trusts whether land or personalty doesn’t matter, tis about identifying express truts and how eq owners of property are, whatever htheir eq

61

so what could it be?

is so it could be ming vase held on a by trust fpr b, or could be shares held by a on trust for x for life, or could be a house held on trust for a and bon trusts for x y z tenants in common equal shares

62

what does the rule here concern?

The rule here cocnerns people who have eq interest under trusts certainly expressed trust-

63

what must it be?

MUST BE IN WRITING UNDERLINE SIGNED BY PERSON DISPOSING OR BY AGENT,

64

so if we have ming vase what?- example

SO IF WE HAVE A MING VASE, IF KRIS WANTS TO give away his remainder inters in iming vase e.g 1 mill quid to someeon her can do that. The rermainder interst doesn’t kick into into life interest does has died, so obvs person of remainder interest their interwst icks in .

65

further on example?

if its on trustee ming vse v has lfie int on m ing vase, what it means she ahs interest which is VESTED IN POSSESION shes the man or woman of moment entitled to prop and ris line when she dies get sht evase, he has the remainder in the is the remainder man.

66

example part 3?

,Now Kris and eq prop writing that vase, obvs doesn’t kick in until perso in possession has died and passed over, so person with remainder interest has concrete prop right in eq and is not vested in poss that only for MAN OF MOMENT its called vested in interest if have concrete prop right of sorts and they can dispose of ti assign it do what they want with it.

67

example part 4?

Now if Kris wants to give away his remainder interest, concrete prop e.g say hes brother he can do that for free or sell b y contract.

68

example part 5?

but if he just wants to give it away this is called disposition and needs to be in signed writing to comply with s.53 1c

69

so any q vested in poss?

SO ANY EQ WHICH IS VESTED IN POSS/INTER and if u want to give it away has to be in signed writing in accordance to s.53 1 c –

70

e.g of vested in poss?

so if me ad v house hold trust for ourselbes, sep shares and wanna give shar to someone else must bein writing to comply with s.53 1 c. so u need this signed writing. This is rule of formality to dispose of eq interest under trust. Pints to note, the dispos must acutall

71

what is meant by directly assignment og equitable interest to 3rd party?

so if me ad v house hold trust for ourselbes, sep shares and wanna give shar to someone else must bein writing to comply with s.53 1 c. so u need this signed writing. This is rule of formality to dispose of eq interest under trust. Pints to note, the dispos must acutall

72

what does s.136 lpa allow?

allows for direct assignmnent of a chose in action,