Trusts Flashcards
(52 cards)
If a trust is made orally or in writing, what are the formalities for it? [exlcuding land]
Prove subject matter, object matter, intention to create a trust
evidence needed for oral
If a trust is made orally or in writing, what are the formalities for it for land/house?
Evidence must be in writing signed by the settlor
Signature can be name written out [on email]
Must contain all material terms of what the settlor intended
A: It must be “manifested and proved” in signed writing (s 53(1)(b) LPA 1925), including:
✅ Property description.
✅ Beneficiaries and their interests.
✅ Trustee duties (if not implied).
A will creates a trust for “promising young tennis players in Wales” at the trustee’s discretion. The trustee has a list of potential beneficiaries. Is the trust valid?
No – The trust fails for uncertainty of objects. The terms “promising” and “young” are too vague (no conceptual certainty under the given postulant test for discretionary trusts).
Q: An accountant writes: “I give you my holiday home. I’d like you to think about giving it to your daughter at 18.” Must the teacher transfer the home at 18?
A: No – The wording is precatory (“I would like you to think about”) and lacks certainty of intention to create a binding trust. The teacher owns the home absolutely.
Q: A manager orally asks a friend to hold a flat in trust for her son at 25, then writes to a solicitor: “My friend holds my flat on trust.” Is the trust enforceable?
A: No – The writing omits material terms (beneficiary’s identity, vesting age), failing s 53(1)(b) LPA 1925.
Certainty of object matter for a fixed trust
complete list test - can you list every B
evidential certainty - is there evidence to identify every beneficiary
conceptual certainty - is the description of the class clear ‘my friends = fail’
Certainty of object matter for a discretionary trust
given postulant test - can you say for certainty this person is a member
conceptual certainty - is the description of the class clear ‘my friends = fail’
administrative workability - is the class to wide?
capriciousness - not be irrational
What must a settlor do to create an enforceable express trust?
Make a valid declaration of trust (certainty of intention, subject matter, and objects).
Constitute the trust by either:
Declaring themselves trustee (no transfer needed), or
Transferring legal title to a third-party trustee (must follow formalities for the type of property).
How is a trust constituted if the settlor declares themselves trustee?
The trust is immediately constituted upon a valid declaration. No transfer is needed
What are the transfer rules for these assets?
Land
Shares
Money
Chattels
Land: Execute and deliver a deed (e.g., Form TR1) to the trustee + register at Land Registry.
Shares (private co.): Complete a stock transfer form + deliver with share certificate to the company.
Shares (public ) CREST
Money: Deliver cash/bank transfer (electronic transfers complete when received).
Chattels: Physical delivery or deed.
What are the 3 tests for exceptions - when equity will intervene?
The every effort test
Rule in Strong v Bird
Unconsciable
Q: When will equity enforce an incompletely constituted trust in the every effort test?
The settlor did dverything they could to transfer the legal title. They passed beyond the point of no return.
(executed all the documents and then dies)
(e.g., signed and sent transfer documents), leaving only third-party action (e.g., Land Registry registration).
When will equity enforce an incompletely constituted trust in the Strong v Bird test ? [Check the executor is the trustee]
Settlor intended immediate trust with third-party trustee.
Failed to transfer title during lifetime.
Intention continued until death.
Intended trustee becomes executor/administrator.
3RD PARTY TRUSTEE BECOMES EXECUTOR AND THEREFORE CAN ENFORCE.
What is an example of a father rebutting the presumption of advancement?
when there has been some demonstration BEFORE the transfer that the father would have retained a beneficial interest
etc] the main reason why the son became the sole legal owner was because only then would the mortgage provider lend the son the balance of the purchase monies required
Does the presumption of advancement apply to mother and son
No
Does the presumption of advancement apply to fiance to fiancee
Yes, provided they marry
How to rebut the presumption of a resulting trust ?
Prove it was a loan/gift
When does an automatic resulting trust arise?
When an express trust fails because:
Uncertainty of object (“to my best friends”),
Violates beneficiary principle
Violates perpetuity period
The purpose is invalid (e.g., non-charitable purpose trust).
For a charitable trust what is needed
- charitable purpose [prevent poverty, advance education]
- public interest [cannot have a personal nexus such as employees of a company, carehome it cannot be too NARROW. It needs to benefit large proportion of public
- not be political
What is a personal nexus
A charitable trust cannot be linked by a personal nexus such as people linked by a relationship to a particular individual or a company.
Can a husband use a text message sent 5 years later to prove he didn’t gift a car to his wife?
NO
Only evidence before the transfer counts
what is not a resulting trust what are the exceptions
voluntary transfers of personalty [woman transfers a cottage to her husband]
purchase money contributions
To prove a resulting trust =
PURCHASE PRICE
For the other partner to establish they have a beneficial interest, they must establish a common intention constructive trust. What are the two steps?
Prove common intention
Prove detrimental reliance
