Unit 1 Flashcards
(22 cards)
Holds the legal title of trust property
Trustee
Holds the equitable interest of trust property
Beneficiary
Define equitable interest
A beneficial interest that splits into two parts:
Personal right to enforce trustees’ duties and seek compensation for breaches
Proprietary right- ownership interest- which can be enforced against the trustee and successors in title and is itself property
Examples of Fixed Trusts
‘On trust for X for life remainder to Y’
On trust for A if he attains 21 but if he dies before then, for B
On trust for C (C is an adult with full mental capacity)
What is a discretionary trust?
Gives trustees discretion about amounts beneficiary may receive/ whether they do so at all
Who has equitable interest in a discretionary trust?
No individual does until trustee exercises discretion in their favour- until then they just have hope they will be chosen by the trustee
Is my interest unconditional?
Vested- yes
Contingent- no
When can I benefit?
In possession- now
In remainder- later, after another beneficiary’s right has expired
What makes someone’s right ‘absolutely entitled’?
Saunders v Vautier
‘Vested, in possession and not limited in enjoyment’
What are the two categories of creation of trust?
Express
Implied
How can express trusts be made?
2 ways
In a settlor’s lifetime by declaring self a trustee or transfer property on trust to trustees
By will- settlor is then called a testator (or testatrix)
How many types of implied trust are there?
What are they?
2
Resulting- implied situations e.g. where there is a gap in beneficial ownership
Constructive- where it would be unconscionable for legal owner of property to deny claimant an equitable interest
Staute regarding requirements of creating a will?
s9 Wills Act 1837:
Must be made in writing
Must be signed by the testator in the joint presence of two witnesses
How would one change a will after it has been created?
Via codicils, must meet same requirements of s9 that original creation of a will must meet
Types of gifts…
Devise- gift of freehold land
Legacy/ bequest- gift of personal property
Specific gifts- gifts of an asset or group of assets which are distinguished from other assets of the same kind
Pecuniary legacies- gifts of money
Residuary gift- what remains after payments of debts etc.
Gifts on trust
Define ademption.
1/2 ways a gift can fail
Testator no longer possess the specified property
What can lapse?
A gift
This is where the beneficiary dies before the testator so the gift fails
The three ways a will can be revoked?
Marriage of the testator
Destruction of the will with intention to revoke
Making a new will which deals with the same property as the first will
What are the intestacy Rules?
Apply to the whole estate if the deceased made no will
All of the deceased estate passes to his PRs who use it to pay tax/ debts
What remains is shared between some of the deceased’s relatives in accordance with a specified formula
What rules govern the distribution of an estate in the absence of a will?
The intestacy rules
What are the three types of Express trust?
Fixed: 2+ beneficiaries, requires agreement between them
Bare: 1 beneficiary
Discretionary: trustees takes active relationship with beneficiary and makes managerial decisions
Define a trust
Binding obligation placed on a person (trustee) to look after property for the benefit another (beneficiary)
