Express Trusts Flashcards
Ways a settlor can create a trust
Intervivos or will
Self as trustee or 3rd party trustees
Steps for a valid trust - overview
- Valid DoT
- Written formalities (land)
- Valid Constitution (if 3rd party trustee)
Valid DoT rules
3 Certainties + Beneficiary Principle + Rules against Perpetuity + Capacity
Certainty of Subject
- Property must be clearly identifiable + segregated (unless shares in same company + same type of share)
Certainty of Intention
- S must have intended a trust (not gift or loan)
Certainty of Object
- Fixed: (1) Conceptual Certainty + (2) Evidential Certainty
- Discretionary: (1) Conceptual Certainty + (2) Administratively workable + (3) not capricious
Beneficiary Principle
Trust must be for benefit legal persons
Rules against perpetuity
- interest must vest within 125 years (i.e. satisfy any conditions)
- if purpose trust capital must be used within 21 years
Impact of no intention
Trustee takes absolutely
Impact of lack of certainty of subject
remains property of settlor
Test for certainty of object - fixed trust
1) Conceptual Certanties: Definition of Bs has a precise objective meaning
2) Evidential Certainty: Able to compile a complete list of all Bs
Test for certianty of object - Discretionary Trust
1) Conceptual Certainty: Precise objective meaning
2) Administratively workable: class of Bs is not too big
3) Not capricious: not irrational + no links to S
Written formalities for trust?
Oral or writing UNLESS land
Land = signed writing containing all terms by settlor
Valid constitution of 3rd party trust
- Land
- Shares
- Money
- Chattels
Land: Deed + send to LR + registration complete at LR
Shares: STF + send to company with share certificate + company updates register of members
Chattels: Deed or physical delivery with evidence of intention to transfer
Re Rose (Every effort)
Still a valid trust if S did everything within their power to effect transfer
* (e.g. signed STF delivered to co or given to trustee)
- (e.g. signed TR1 to trustee or LR (not soliciotr)
Choithram (Unconcionable)
- S is one of trustees
or - S tells B + B relied to detriment on promise
Strong v Bird (Fortuitous Vesting)
- T is also a PR of T’s estate
- Immediate intention to transfer (not conditional on anything)
- Intention continued until death (not given away or treated as own)
DMC
- Gift made in contemplation of imminent death + known cause
- Conditional on death
- Parted with item or something representing item’s title
