Trusts vocab

Question 1

bailment

Answer 1

the transfer of possession of chattels from one person to another

Question 2

bailor

Answer 2

the transferor

Question 3

bailee

Answer 3

the transferee

Question 4

precatory words

Answer 4

words expressing confidence, wish, belief, desire, hope or recommendation e.g. ‘I wish’, ‘I hope’: unlikely to result in the creation of a trust

Question 5

‘the trust property requirement’

Answer 5

It must be possible to identify the trust property

Question 6

‘vest’ property in the trustees

Answer 6

transfer the legal title of the property to the trustees using the proper formalities

Question 7

realty

Answer 7

real property; land and anything attached to the land e.g. buildings

Question 8

CREST

Answer 8

the central securities depository for markets in the UK

Question 9

Secret trust

Answer 9

an unofficial/undocumented arrangement between a testator and trustee by which the trustee will receive property from the testator, but must then pass the property onto another person who benefits

Question 10

Full-secret trusts

Answer 10

Neither the existence of the trust/nor the identity of the beneficiary are disclosed in the will

Question 11

Half-secret trust

Answer 11

Formed when a testator leaves property on trust in his will, but communicates the terms of that trust to the trustee in private

Question 12

vested in possession

Answer 12

a present right to present enjoyment

Question 13

vested in interest

Answer 13

a present right to future enjoyment

Question 14

When will an interest that is vested in interest vest?

Answer 14

in possession in the future

Question 15

sui juris

Answer 15

of full age, no disability

Question 16

Rule against remoteness of vesting

Answer 16

The trust property must vest within the statutory period of 125 years. It is possible to wait and see whether it vests in that time.

Question 17

The purposes of a charitable trust must be

Answer 17

wholly and exclusively charitable

Question 18

Threshold for someone to have had “actual knowledge”

Answer 18

the stranger knew about the breach of trust

Question 19

constructive knowledge

Answer 19

the stranger to the trust has no actual knowledge of the breach but wilfully shut their eyes to the obvious, or wilfully and recklessly failed to make enquiries that an honest and reasonable person would have made.

Question 20

The Baden Scale

Answer 20

used to determine whether a person had knowledge of their involvement in breach of a trust

Question 21

Fair-dealing

Answer 21

the trustee purchases the beneficiary’s equitable interest in the property in an honest and fair transaction, having made full disclosure to the beneficiary

Question 22

personalty

Answer 22

movable assets; any property other than realty

Question 23

impound a beneficiary’s interest

Answer 23

seize/take control of a beneficiary’s entitlement under the trust; so that it can be used to indemnify the trustee