Trusts Flashcards
1
Q
Types of Express Private Trusts (5)
A
- Fixed
- Discretionary
- Purpose
- Inter Vivos Trust - Over a Lifetime
- Testamentary Trust - Arising from Will
2
Q
Express Private Trusts Key Requirements (3)
A
- Express Intention
- Subject Matter
- Object
3
Q
Express Intention (5)
A
- Words or Conduct
- Own Property
- Trust Immediately
- Evidence through Witnesses (Informal)
- If Fails, Property passes as Gift to Trustee
4
Q
Subject Matter (4)
A
- Tangible Stock must be Separated
- Property must already exist
- Beneficial Entitlement must be Certain
- Uncertain Subject Matter - Property Reverts
5
Q
Number of Trustees Required (3)
A
- Usually 1
- 2-4 for land
- Can increase to maximum of 4
6
Q
Rules Against Perpetuity (2)
A
- Contingent interest void if it does not vest within 125 years
- Noncharitable trusts - limited to 21 years or life in being plus 21 years
7
Q
Inter Vivos Trusts (3)
A
- Trusts created during lifetime
- Settlor can declare themselves trustee
- Trust with another as Trustee
8
Q
Exceptions to “Equity will not Assist a Volunteer” (4)
A
- Every Effort Test - Imperfect Gift will be held
- Donatio Mortis Causa - Gift by the Reason of Death
- Rule in Strong v Bird - Death before constitution, trust treated as validly constituted
- Proprietary Estoppel - Gift Valid when Assurance, Reliance, Detriment
9
Q
Requirements of Testamentary Trust (4)
A
- Valid Will
- Appropriate Trustee
- No breach of perpetuity rules
- No transfer requirement at the time of creation
10
Q
Secret Trust Fails if (2)
A
- Trustee fails to accept
- Did not know until after settlor’s death
11
Q
Half Secret Trust requires (1)
A
communication of beneficiary’s identity must be made on or before will execution
12
Q
Fixed Trusts: Vested Interest
A
No condition attached to interest
13
Q
Fixed Trusts: Contingent Interest
A
Condition attached to interest
14
Q
Fixed Trusts: Limited Interest
A
No Right to Trust Capital
15
Q
Fixed Trust: Absolute Interest
A
Right to Capital and Income
16
Q
Rule in Saunders v Vautier (3)
A
- Terminate Trust
- If all beneficiaries have absolute interest, adults and sound of mind
- Can apply to fixed or discretionary
17
Q
Resulting Trust Arises (2)
A
- Voluntary Transfer or Purchase in Name of Another
- Failure to Exhaust Beneficial Interest under Express Trust
18
Q
Requirements for Resulting Trust in Real or Personal Property (3)
A
- Money used to purchase property
- Money must be provided at or before time title vests in trustee
- Claimant has burden of proving they paid towards purchase
19
Q
Presumption of Advancement in Resulting Trusts
A
Under the obligation to provide for the other party (look at relationship)
20
Q
Family Homes: Legal Title in One Name - Proprietary Estoppel (3)
A
- Assurance
- Reliance on Assurance
- Detriment
21
Q
Common Intention Constructive Trust (3)
A
- Common Intention
- Reliance to Claimant’s Detriment
- Claimant attempts to assert an equitable interest in the family home
22
Q
Charitable Trusts: Rules Against Perpetuity (3)
A
- Does not apply
- Initial gift within 80 years
- subsequent gifts from charity can happen anytime
23
Q
Requirements for Charitable Trusts (3)
A
- Fall within defined charitable purpose
- Public benefit
- Exclusively charitable
24
Q
Cy-Pres Doctrine (4)
A
- Applies to Charitable Trusts
- Impossible or Impractical, Court will apply trust property to similar charitable purpose
- Initial failure: General Charitable Intent Required
- Subsequent Failure: No Charitable Intent Required
25
Denly Trust (2)
1. Human beneficiaries can enforce trust
2. Can't terminate trust using Saunders v Vautier
26
Honorary Trust
Perpetuity Period applies: Human life in being plus 21 years or 21 years
27
Hierarchy of power to replace trustees (4)
1. Document
2. Continuing trustees
3. Personal representatives of last surviving trustees
4. Court
28
Retirement without appointing (2)
1. Consent of co-trustees and any person named in trust document
2. At least two trustees or trust corporation must remain in office
29
Duty Not to Profit from Trusteeship
1. When trustee can prove that they were going to be appointed director anyways
30
Duties of Trustees (10)
1. Deal appropriately with the trust property
2. Statutory duty of care
3. Traditional duty of care
4. Act jointly if there is more than 1 trustee
5. Act personally and not delegate
6. Take possession of trust property
7. Keep accounts and records
8. Act impartially and treat them all equally
9. Confidentiality
10. Invest
31
Duty to Invest (4)
1. Authorised investments - UK, Document can restrict
2. Criteria - Suitability and Diversification
3. Advice of Investments -Subjective and Objective
4. Review
32
Power of Maintenance (4)
1. Interest in income
2. Paid directly to school or parent/guardian
3. Ends when beneficiary turns 18
4. Upto October 2014 - Apply a Reasonable Amount
33
Power of Advancement (5)
1. Vested, Remainder, Contingent Interest
2. Amount must not exceed entitlement
3. Advances must be factored into final distribution
4. Consent of person with prior interest is required
5. Upto October 2014 - Limited to one hald of the beneficiary's vested or presumptive share
34
Liability of Trustees (4)
1. Only trustees responsible liable
2. When more than one - liability joint and several
3. 6 year limitation period when limitation period starts for remainder interest
4. No limitation in case of fraud or recover property from trustee
35
Trust Property Not Mixed (2)
1. Claim back property
2. Claim charge over asset to the amount if it has been substituted
36
Bona Fide Purchaser Liability (2)
1. Paid in good faith and without notice
2. No claim against person
37
Innocent Volunteer Liability (2)
1. No personal claims
2. Proprietary claims allowed
38
Knowing recipient (2)
1. Beneficiaries can bring personal claim
2. Proprietary claims allowed
39
Dishonest Accessory (2)
1. Personally liable
2. Can be active or passive
3. Proprietary claims unlikely
