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Equitable Principles Notes

GDL Law Notes > GDL Equity and Trusts Notes

This is an extract of our Equitable Principles document, which we sell as part of our GDL Equity and Trusts Notes collection written by the top tier of Cambridge/Bpp/College Of Law students.

The following is a more accessble plain text extract of the PDF sample above, taken from our GDL Equity and Trusts Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

EQUITABLE PRINCIPLES

Types of Trust

Fixed trust - trustee must give property out to the named objects + has no discretion as to how it's to be distributed

Discretionary trust - trustee must give property out to the named objects + has discretion as to how it's to distributed

Discretionary power of appointment - trustee has discretion as to whether & to what extent to give the property out to named objects and, to the extent that he decides to do so, in what proportions

Fixed power of appointment (least common) - trustee has discretion as to whether to give out the property to the named objects but, if he decides to give out, must do so in pre-determined proportions.
Trusts vs Powers

Trusts impose obligations on trustees. A mere power has discretion.
o The court will enforce a trust not a power.
o The objects of a fixed trust must be certain, they may be more loosly described for a power
Examples of Powers

Re Gulbenkian [1970] - to use the estate for the maintenance or personal support of a listed group

Re Hay' Settelment Trust [1982] - here there is a gift over in default, that typically indicate a power rather than a trust.
Classification of Trusts

An express trust is usually deliberately set up by the settlor,
though it may be deduced from their informal language or conduct.
 A private express trust is for the benefit of individual persons.
 A charitable express trust is for public purposes, not for private individuals as such.
o Other trusts may be implied by law, in some cases despite the intentions of the parties.
 Resulting trusts occur when the property 'results' or
'returns' to the settlor, because settlor did not dispose of the trust property fully
 Constructive trusts are trusts imposed by operation of law in a number of different circumstances, mostly to prevent an unconscionable outcome.
 Trusts may also be implied by statute. For instance, on an intestacy, or where there is co-ownership of land,
LPA 1925 imposes a trust of land.
o 'Bare' trusts exist where a beneficiary, who is a person of full capacity viz. over 18 years of age and of sound mind (sui juris), is absolutely entitled to the trust property

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