Unit Two (Key Info) Flashcards

1
Q

THE THREE CERTAINTIES - given by Knight v Knight

A
  1. Intention (to create a trust)
  2. Subject Matter (whats in it)
  3. Objects (the beneficiaries) (whos it for)
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2
Q

Certainty of Intention

A

“I am giving this money to you for you to hold on trust for your children” - IMPOSES AN OBLIGATION
“I am giving this money to you and you can spend it as you wish on yourself or your children” - A MORAL OBLIGATION, BUT NO LEGALLY ENFORCEABLE DUTY.

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3
Q

IMPERATIVE WORDS

A

Obligate the recipient - are sufficient to make a trust, show sufficient certainty of intention.

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4
Q

PRECATORY WORDS

A

Words that just appeal to him - aren’t sufficient to make a trust, don;t show sufficient certainty of intention.

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5
Q

What if there is no Certainty of Intention?

A

need all three certainties to have a trust… no certainty of intention = no trust

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6
Q

What happens to money if no certainty of intention?

A

There is no trust at all. So, what happens to the property? Outright gift to recipient. No trust obligations attached to the disposition.

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7
Q

Certainty of Subject Matter

A

Does not have to stipulate exact amount, but the property forming the subject matter of the trust has to be capable of being clearlt defined - maybe at some point in the future.
“I give a pecuniary legacy of £10,000 to my daughter Kaye Cressipy absolutely”

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8
Q

Note from Boyce v Boyce

A

not only must the propery being held on trust be certain, but also that the interest each beneficiart is to recieve must be certain

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9
Q

Note from Re Golay

A

Whilst normally a gift of ‘a reasonable payment’ would be too vague, and hence uncertain, the phrase ‘reasonable income’ enabled an objective assessment of what that might be based on her circumstances.

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10
Q

Can future property (“after acquired property”) be the subject matter of a trust?

A

NO - Re Ellenborough

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11
Q

Can you create a trust of some money out of a larger sum of money without seperating out that smaller sum of money?

A

You can do, but some cases aqre a bit messy in this area and sometimes it doesn’t work.

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12
Q

What if there is no certainty of subject matter?

A

There can be no trust at all. Nothing can have been disposed of beccause it is uncertain what that would have been.
Everything remains as it originally was everything stays with the settlor.

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13
Q

Fixed trust

A

Fixed shares
Obligation on Trustees
No discretion

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14
Q

For a valid created of a private express trust there needs to be…

A

certainty of intention
certainty of subject matter
certainty of objects

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15
Q

Discretionary trusts

A

Obligation on trustees
Duty to exercise discretion
No pre-ordained shares

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16
Q

Why is Certainty of Objects required?

A

TRUSTEE - trustees cannot carry out their duty to distribute the trust fund to the right beneficiaries unless they know who the beneficiaries are
COURTS - if trustees do not perfomr their duties or breach them, the court has power to ensure comploiance with the trust. to fulfil this function the court must be able to ascertain who the beneficiaries are
BENEFICIARIES - can enforce the trustees’ duties and have standing to complain to the court. But how can they do this if the definition is so unclear that it is not known who is and who is not a beneficiary.

17
Q

The test for certainty of objects

A

Got to be humans
A trust for named people or a clearly defined group of people will be workable
Two different tests depending on the type of trust

18
Q

Test for certainty of objects - for a fixed trust

A
  • What would the court/trustee need to knwo to split the money between all of the fixed beneficiaries
  • It would need a list of them - complete list test
  • A full list of beneficiaries must be able to be created - so all beneficiaries must be able to be identified - need evidential certainty
19
Q

Test for certainty of objects - for a discretionary test

A
  • Power - someone has a power of selection amongst a group of beneficiaries - power of selection been given to someone
  • The person who has that power doesn’t have to select if they do not want to.
20
Q

Harman J. in Re Gestetner

A

Donces of a power have to be able to say with certainty of any given person that he is or is not within the scope of the power. The ‘is or is not postulant test’

21
Q

Administrative Unworkability

A

If the description of the class of beneficiaries is so hopelessly wide as to not form anything like a class, it would be administravely unworkable

22
Q

Capriciousness

A

Stupid

23
Q

Special Power

A

Person who has power can choose from a specified closed group of people e.g. members of a tutorial group

24
Q

General Power

A

Can be exercised against anyone in the world! Power exercised during your lifetime, almost as good as absolute ownership

25
Q

Fiduciary Power

A

a power given to someone but that someone is alreadt in a fiduciary position (already a trustee/ executors), because they have that responsibility, they have got more duty to do.

26
Q

FIXED TRUST

A

trustee under obligation to distribute according to the terms of the trust - no discretion at all

27
Q

DISCRETIONARY TRUST

A

trustee under an obligation to distribute at some point, but has discretion as to how and when. Trustee also under an obligation periodically to consider whether to distribute.