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equity and trusts > Express Trusts > Flashcards

Express Trusts Flashcards

1
Q

What is a trust?

A

Taking a piece of property and separating ownership from the beneficial enjoyment of it

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2
Q

When a trust is set up, who does it belong to?

A

The settlor

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3
Q

When the settlor wants to make a trust, who do they appoint?

A

A trustee

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4
Q

Can the settlor also be a trustee?

A

Yes

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5
Q

Can contractual agreements be a trust?

A

No

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6
Q

What are some uses of a trust?

A

.wealth management (eg trust fund)
.Shared ownership of land
.tax avoidance

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7
Q

What does the case of milroy v lord dictate?

A

The methods of constitution

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8
Q

What are the three options listed in milroy v lord when a settlor wants to “do something” with the property?

A

.A outright gifts the property to B
.A declares themselves trustee of the property to hold on trust for B
.A transfers the property to C the trustee to hold on trust for B

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9
Q

What does the Law of Property Act 1925, s.53 say that signed writing is required for? (3)

A

A) creating interests in land
B) declaring trust over land
C) transferring pre-exisintg equitable interests

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10
Q

What section of the Law of Property Act 1925 are we interested in?

A

S.53

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11
Q

What were some cases where the courts struggled to distinguish between a gift and an express trust? (2)

A

.jones v lock
.choithram v pagrani

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12
Q

Did the courts decide that a gift was made, or an express trust in Jones v Lock?

A

It was a failed gift and not a declaration of trust

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13
Q

Choithram v pagrani facts

A

Choithram verbally gave all his money to a charitable trust but died without any physical transfer of money. Courts said he set up the trust properly

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14
Q

What does the case of knight v Knight give us?

A

The three certainties

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15
Q

What are the three certainties?

A
  1. Words are to be followed (certainty of intention)
  2. The subject has to be clear (certainty of subject matter)
  3. The objects intended to be given are clear (certainty of objects)
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16
Q

Why must a trustee obey the terms of a trust?

A

Personal liability for breach of trust

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17
Q

What can happen if a trustee is not performing the trust well?

A

The courts can step in

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18
Q

Are there any magic words?

A

No

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19
Q

A case where a trust was created without the word “trust” being used?

A

Re kayford ltd

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20
Q

A case where there was no trust despite the word “trust” being used?

A

Tito v Waddell

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21
Q

What type of word must be used to ensure a trust is made, and not a gift?

A

Imperatives such as:
.i declare
.i direct
.on trust for…

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22
Q

What is the use of imperative words in trusts?

A

They make clear that a trust is intended to be made

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23
Q

What are the opposite of imperative words?

A

Precatory words (statements of wishes)

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24
Q

What does the case of lamb v eames show?

A

Statement of wishes (precatory words)

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25
Q

Lamb v eames facts?

A

Gave widow property to use as she thought best. Gave some to his illegitimate son. His real son sued.

She needed o have exceeded authority and she didnt here

26
Q

What is important when coming to establish a. Trust?

A

The substance of the intention rather than the magic words used

27
Q

JSC v Pugachev facts?

A

Russian olegark put money on trust but had so many clauses that he essentially retained complete control of it, when trusts are there to relinquish control.

Trust was void as he intended to keep control of the money

28
Q

What is the case where a trust was made, but the clauses made it so that the settlor still had full control of the money?

A

JSC v Pugachev

29
Q

What does certainty of subject mater refer to?

A

The beneficiary

30
Q

Cases for property on trust?

A

.Palmer v simmonds
.re GOLAY’S WT

31
Q

Facts of palmer v simmonds?

A

Gifted shares and told to hold the “bulk” on trust. Bulk is nota legal term nor does it have a percentage. Trustee can’t be liable for getting it wrong when instructions are unclear

32
Q

Re Golay’s WT facts?

A

Trustee told to enjoy one of the flats and receive a reasonable income from the other properties. Which flat and how much?

Judge said reasonable is a legal term and so trust was upheld

33
Q

Cases for deciding respective shares of property?

A

.Burrough v philcox
.boyce v boyce

34
Q

Burrough v philcox facts

A

A man said that the surviving one of his two children would decide the properties/portions that would go to his nieces and nephews. The last son did before doing this.

35
Q

Burrough v philcox court decision?

A

Courts shared it equally between the nieces and nephews. They said equity is equality

36
Q

Boyce v boyce facts?

A

Gave two houses to his wife in a trust to give to his daughters to choose from. One died before making a choice.

37
Q

What does certainty of objects regard?

A

Property

38
Q

What are the concepts of certainty of objects?

A

.conceptual certainty
.evidential certainty

39
Q

Explain conceptual certainty (beneficiaries)

A

Leaves property to classes of people rather than specific names (eg, parent, relative, friend etc)

40
Q

Explain evidential certainty (beneficiaries)

A

Someone who can be inferred from the information (eg. A parent could be biological or adoptive but it wont take long to find out which is meant)

41
Q

What is a fixed trust?

A

The terms of the trust specify every decision

42
Q

What does a fixed trust have?

A

No discretion (eg no wiggle room)

43
Q

What does a fix trust need in order to have no discretion?

A

a complete list

44
Q

Which case confirms the need for a complete list in a fixed trust?

A

. IRC v broadway cottages

45
Q

What is the rule for fixed trusts where a beneficiary is missing?

A

Trustee act 1925, s.27: put an advert in the newspaper for them and if they don’t claim it in the time period, their share is divided amongst the rest

46
Q

Which act and section says that when a beneficiary of a fixed trust is missing, an advert shall be put in a newspaper to allow them to claim their share, or else the money be divided amongst the rest?

A

Trustee act 1925, s.27

47
Q

Case fora missing beneficiary in a fixed trust?

A

Re Benjamin

48
Q

What is a discretionary trust?

A

Aka trust powers, The trustee can do what they see fit in some circumstances

49
Q

Which case tells us that a complete list within a discretionary trust is no longer necessary?

A

McPhail v doulton

50
Q

What is the rule in McPhail v Doulton regarding discretionary trusts?

A

The beneficiary must be either:
.in the class
.not in the class
.not really sure?

51
Q

What happens under McPhail v Doulton if it is uncertain whether a beneficiary is within a class or not?

A

Can’t have any dont knows. They are out of the trust

52
Q

Which case confirms McPhail v Doulton’s 3 category rule?

A

Re Baden

53
Q

What is significant about the judgment in Re Baden?

A

The three judges all disagreed with each other.

54
Q

What are gifts subject to condition precedent?

A

Fixed sums that the trustee must appoint to beneficiaries in the class defined by the condition precedent

55
Q

Which case shows that gifts are subject to the condition precedent?

A

Re Barlow

56
Q

What test did Re Barlow produce?

A

Can you say with certainty that the person would clearly be a member of the class of people?

57
Q

Which test does Re Barlow adopt?

A

Re Allen

58
Q

What is the idea behind perpetuities?

A

That wealth should not be tied up for long periods of time

59
Q

What is the beneficiary principle?

A

That trusts are for people and not purposes.

60
Q

What happens if a missing beneficiary in a fixed trust doesn’t come forward?

A

The money is divided equally amongst the other beneficiaries

61
Q

What does the perpetuities act 1964 say?

A

That they have until the age that the last person who was relevant and alive when the trust was created dies, plus 21 years, then the money goes away.

equity and trusts (4 decks)

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