secret trusts

Question 1

what are secret trusts

Answer 1

trusts that are a secret that is kept from the public

Question 2

why do we have secret trusts

Answer 2

for secrecy
historically used to provide for secret mistressess and children form such relationships

Question 3

what are 2 types of secret trusts

Answer 3

1) fully secret trust
2) half secret trust

Question 4

how to identify a fully secret trust

Answer 4

1) leave a gift for someone
2) must commuicate with the recepit of the gift - only the trustee and the beneficiary are kept as a secret

Question 5

how to identify a half secret trust

Answer 5

need to read the will, the secret won’t look like a gift but it shows that the trust as been created but the beneficary is kept as a secret

Question 6

why are secret trusts upheld

Answer 6

1. The prevention of fraud
2. Secret trusts operate outside of the will

Question 7

what is the 3 requirements of a creation of secret trusts

Answer 7

1) intention - the create a secret trust
for fully ST - you will never find the intention of the will you will find the intention on a seperate communication from the will
half ST - the intention is on the will
2) communication - the terms of the trust to the trustee
CA - Re Snowdon - “he will know what to do”
3) acceptance by the trustee - CA moss v cooper
in this case it states that if the trustee is silent the trustee is still part of the ST

Question 8

what is communication for fully ST

Answer 8

at the same time as the will is made
after the will is made
but the communication must be made before the Testator’s death.
CA for communcation is:
1) moss v Copper
2) walgrave v Tebbs
3) Re Boyes

Question 9

what are the possible outcomes once there has been an attempted to create a fully ST

Answer 9

1) vaild fully ST is created
2) the trustee takes the gift benefically i.e they keep the property for themself
3) a resulting trust is created and the property goes back into the testator’s estate

Question 10

what is communication for half ST

Answer 10

differes from fully ST
1) the communication must be made either before or at the same time as the will is made CA - Re - Bateman
2) no evidence that contradicts the terms of the will CA - Re Keen (1937)

Question 11

what are the two rules relating to communication as regards to half ST

Answer 11

1) cant contradict the terms of the will
2) no evidence can be accepted of a communication after the will is made CA - Johnson v ball

Question 12

what are the possible outcomes once there has been an attempted to create a half ST

Answer 12

there are two possible outcomes
1) a vaild hald secrey trust is created
2) a resulting trust is created and the property goes back into the testator’s estate

Question 13

increasing the legacy?

Answer 13

if the testator is leaving anything for the trustee - they need to let the trustee know
CA - re collin copper [1939]

Question 14

can beneficary become a witness to witness the will?

Answer 14

according to s.15 wills act 1837 - witness to a will cannot take a legacy in the will
CA - Re Young [1951]

Question 15

what happens if the secret beneficary dies before the testator?

Answer 15

under s.25 wills act - the gift in a will = fail

Question 16

what happend if the secret trustee dies before the testator?

Answer 16

1) If the trustee of a fully secret trust dies in the lifetime of the testator, the trust will fail. CA - re Rees
2) in the case of half ST = contray to the express provision in the will - equity will not allow a trust to fail for the lack of a trustee

Question 17

can a secret trustee benefit under a secret trust

Answer 17

CA - Re Rees 1949 - if a testator wishes his trustee to benefit from a secert trust, the intention should appear in the will for all to see

Question 18

what happens if there is two or more secret trusts

Answer 18

CA - re Stead - there are rules that are required
1) if the gift is to the secret trustees = joint tenants
2) if communication + acceptance is done by one trustee = both are bound

Question 19

secret trust of land?