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Law - Equity > Express Trust > Flashcards

Express Trust Flashcards

1
Q

what is an express trust?

A
  • a way of splitting ownership
  • One person, the trustee, who holds property for the benefit of somebody else. The trustee doesn’t get any of the benefits, the beneficiary does.
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2
Q

Uses of Trusts (why you want the split)

A
  • Wealth management
  • Shared ownership (e.g. of land)
  • Secrecy
  • Tax avoidance
  • Asset shielding (against insolvency)
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3
Q

What is a Trust?

A
  • Property begins with the settler (can be the trustee or the beneficiary).
  • They can self-declare themselves the trustee or they can transfer legal title to somebody/ group of people so they become the trustee and then they drop out of the picture and looses control so there is a separate settlor - 3 party situation
  • Common law idea
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4
Q

first thing to do when making a trust

A

constitute that trust

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5
Q

what are the 3 methods of constitution and the case

A
  1. A makes an outright gift of the property to B;
  2. A declares themselves trustee of the property, to hold on trust for B
  3. A transfers the property to C as trustee, to hold on trust for B (declaration still required)
    - Milroy v Lord (1862)
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6
Q

what does the Law of Property Act 1925, s 53 do (Formalities)

A
  1. Signed writing required for:
    a) Creation of interests in land
    b) Declarations of trust over land
    c) Transfers of pre-existing equitable interests
  2. Exception for resulting and constructive trusts - Informal trusts do not require formalities
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7
Q

Jones v Lock

A

A cheque handed to a baby - words the father said could not be a self-declaration of trust, he meant to give a gift.

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8
Q

Richards v Delbridge

A

Transfer and declaration did not match – not a trust

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9
Q

Paul v Constance

A

‘The money is as much yours as mine’ – treated it as a joint account, meant to constitute a trust for their equal benefit.

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10
Q

Choithram v Pagarani

A

Self-declaration by one of several trustees – Lord Brown Wilkinson, ‘equity with not strive… to defeat a gift,

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11
Q

principle in Strong v Bird (1874) and what other cases was it applied to (2)

A
  • ‘Fortuitous vesting’ on death of property owner - there has to be delivery
  • Applied in Re Ralli’s WT (1964): Settlor died and will transferred the property to the intended trustee - executor case
  • And also Re Rose (1952)
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12
Q

what are the Three Certainties applied to? and what they? and in which case is found in?

A
  • gifts and trust
  • Knight v Knight
    1) if the words are so used, that upon the whole, they ought to be construed as imperative;
    2) if the subject of the recommendation or wish be certain;
    3) if the objects or persons intended to have the benefit of the recommendation or wish be also certain.
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13
Q

Re Hay’s ST

A
  • Preference is to uphold trusts
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14
Q

what are the reasons for the 3 certainties (5)

A
  • A trustee must obey the terms of the trust
  • Personal liability for breach of trust
  • Unfair on trustee to be faced with difficulties or impossibilities in managing the trust given this liability
  • Court can step in as last resort if the trustee does not perform
  • The court needs to know what it is doing too
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15
Q

what is Certainty of Intention and how should id be assessed?

A
  • It’s the settlor’s intention
  • But still an objectively construed intention
  • take in the surrounding context and knowledge of the settlor
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16
Q

does the word “trust” matter and what cases back up your answer

A
  • No
  • Re Kayford Ltd [1975] 1 WLR 279 (Ch) 282: Trust created without use of the word ‘trust’
  • Tito v Waddell (No 2) [1977] Ch 106 (Ch) 225: No trust despite the use of the word ‘trust’
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17
Q

what imperative words might be required

A
  • Imperative words required: ‘on trust for’, ‘I declare’, ‘I direct’
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18
Q

What cases use precatory words (3)

A
  • Lambe v Eames: gave the property to her widow, ‘in any way she may think best.’ Not a trust. Court doesn’t look at moral intentions.
  • Re Adams and Kensington Vestry: gave everything to his wife. ‘in full confidence that she will do what is right’. Doesn’t create a trust
  • Re Diggles: ‘it is my desire’. Loosely worded wish. Not binding.
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19
Q

cases for looking for the substance of the intention

A
  • Comiskey v Bowring Hanbury

- Re Steele’s WT

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20
Q

why was Midland Bank v Wyatt considered a “sham”

A
  • the declaration of trust was not what it purported to be but a pretence
  • He never intended to hand over the family home to his wife and daughters
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21
Q

SC Mezhdunarodniy Promyshlenniy Bank v Pugachev [2017]

A
  • Massively Discretionary Trust

- There was no certainty of intention to set up a trust

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22
Q

What is Certainty of Subject Matter (Property)

A
  • Identifying the Property

- T needs to know what to manage!

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23
Q

what was the issue in Palmer v Simmonds (1854) and why?

A
  • the word “bulk” was the issue.

- Subject matter wasn’t certain.

24
Q

what 2 cases involved technical terms and what where the terms

A
  • Re Kolb’s WT - ‘blue chip securities’ is not a technical term. ‘residue’ is a technical term
  • Re Golay’s WT - reasonable is a technical term because it can be worked out.
25
Q

cases for when the courts are Identifying the Respective Shares (3)

A
  • Burrough v Philcox
  • Boyce v Boyce
  • Re Knapton
26
Q

cases for property in bulk (2)

A
  • Re London Wine Shippers (1975): Wine bottles – choses in possession
  • Hunter v Moss (1994): Shares – choses in action
27
Q

What is needed for Certainty of Objects (Beneficiaries)

A
  • Conceptual certainty. E.g. Parent are certain; relative is not that certain)
  • Evidential certainty. (Can it be proved. Is X a parent)
  • Ascertainability. Administrative workability
28
Q

what is needed for a fixed trust and what 2 cases confirm this (certainty of objects)

A
  • No discretion [is needed]
  • Complete conceptual and evidential certainty required (‘complete list’)
  • IRC v Broadway Cottages (1955);
  • Confirmed in OT Computers Ltd v First National Tricity Finance Ltd (2003)
29
Q

give 2 case examples of where there were problem with fixed trusts (certainty of objects)

A
  • Re Gulbenkian’s Settlements - problem with ‘Friends’

- Re Sayer - Records of (ex-)employees clearly incomplete. Trust doesn’t hold up.

30
Q

What does the Trustee Act 1925, s 27 sat about missing beneficiaries and name the case?

A
  • advertise it and inform the missing person and if they don’t show up the person can distribute the money among the beneficiaries as they wish
  • Re Benjamin
31
Q

what else can be done if the beneficiaries are missing

A

professional insurance can be taken out

32
Q

what is needed for Discretionary Trusts AKA Trust Powers (certainty of objects)

A
  • All relevant property must be appointed, but otherwise T has discretion
33
Q

what is the McPhail v Doulton, Re Baden’s Deed Trusts (No 1) test

A

Can one ascertain if any given postulant (protentional beneficiary) is in the class or not (‘individual ascertainability’ or the ‘in or out test’)

34
Q

What did Sachs LJ say in Re Baden’s Deed Trusts (No 2)

A
  • Enough to be able to prove X is in the class. No need to positively prove X is not in the class. (anyone who they are not sure of is not included)
35
Q

how can uncertainty be cured via delegation, give a case example (2)

A
  • by an umpire
  • Re Coxen
  • Re Tuck’s ST - rabbi
36
Q

with Fiduciary Powers what has to be done with the power (certainty of objects)

A
  • The power does not have to be exercised

- But the T must consider exercising it

37
Q

what do you need to look for with fiduciary powers (certainty of objects)

A
  • a ‘gift over’ (a second donation)
38
Q

what is the test for fiduciary powers (certainty of objects)

A
  • Same test as for discretionary trusts
39
Q

what are the cases for fiduciary powers (certainty of objects)

A
  • Re Gulbenkian’s Settlements [1970] AC 508 (HL)

- Re Gestetner’s Settlement [1953] Ch 672

40
Q

how do gifts work in regards to certainty of objects and what is the case

A
  • Gifts can only be given to people who satisfy this condition and that condition defines the class of people who are allowed to benefit
  • Re Allen
41
Q

what is the test for members of a class and what case is it from?

A
  • Test: Can one can say with certainty that some person would clearly be a member of the class?
  • Re Barlow
42
Q

What is required from a fixed trust when there is a duty to survey the field

A
  • Complete list required – defines what one must do
43
Q

what is a duty to survey the field

A
  • looking at the class of beneficiaries and deciding who is eligible and how are they eligible
44
Q

what is the main case for Discretionary Trust when surveying the field

A
  • McPhail v Doulton, Re Baden’s Deed Trusts (No 1)
45
Q

what is the main case for fiduciary powers when surveying the field

A
  • Re Gestetner’s Settlement
46
Q

what is Administrative Unworkability and the 2 cases

A
  • Can the Trust actually make this work?
  • Probably applicable only to discretionary trusts
  • Inability to do any good with the fund
  • Re Gulbenkian’s Settlements (1970)
  • R v District Auditor, ex p West Yorkshire Metropolitan County Council (1986)
47
Q

what case defines capriciousness and what is it

A
  • Brown v Burdett (1882): Trust is capricious and has no reasonable purpose and is invalid.
48
Q

what is the general policy for perpetuities

A
  • General policy: Wealth should not be tied up for long period of time. The ‘Dead Hand’ rationale
49
Q

what tensions are there between the certainties

A
  • Upholding the actual intention of the settlor.

- That intention being impossible or impracticable to carry out  they invalidate the trust

50
Q

who can benefit from the trust

A

non trustees

51
Q

what is a resulting trust and what is the case

A
  • a resulting trust is implied and equitable ownership results to the person who advances the purchase money because it is presumed there is a trust but since there are no instruction on what to do with it, the ownership goes back to the settlor:
  • Dyer v Dyer
52
Q

when does ownership ‘results’ back to who provided the value

A
  • If there is no obligation or instruction to deal with the property
  • Resultare = spring back
53
Q

what are 3 failures of certainty of intention

A
  • If there has been a transfer of property from settlor to trustee but there is not certainty of intention to create a trust, the would be trustee get a gift
  • If a settlor fails to self-declare a trust, she remains the owner of the property: Jones v Lock (1865) LR 1 Ch App 25 (CA Ch)
  • If there has been a transfer of property to the would-be trustee, there is no trust but an absolute transfer; a gift.
54
Q

what are 2 failures of Certainty of Subject Matter

A
  • If the property cannot be ascertained, similarly there is no trust and ownership remains with the transferee or settlor. They are not benefiting because they hold some of the shares on a trust  the settlor has everything
  • If the beneficiary’s shares cannot be identified, the transferred property is held on resulting trust for the settlor.
55
Q

what are 2 failures of Certainty of Objects

A
  • If a fixed or discretionary trust fails because the relevant certainty of objects test fails, the transferred property is again held on resulting trust.
  • If a fiduciary power fails for want of certainty of objects, the transferred property is held for the recipient of the gift over absolutely.
56
Q

what is The Beneficiary Principle

A
  • Principle is that trusts are for people, not purposes (excluding the exceptions and charitable trusts)
  • There must be a beneficiary or beneficiaries, not least because they are the only people who can enforce the trusts

Law - Equity (6 decks)

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