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Secret Trusts, Purpose Trusts And Unincorporated Associations Notes

GDL Law Notes > GDL Equity and Trusts Notes

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A more recent version of these Secret Trusts, Purpose Trusts And Unincorporated Associations notes – written by Cambridge/Bpp/College Of Law students – is available here.

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E&T: Secret Trusts, Purpose Trusts and Unincorporated Associations

Secret Trusts

- Secret trust: trust to take effect on death not mentioned/fully disclosed in will.
- Exempt from testamentary trust formalities (s9 Wills Act 1837): (a): in writing, signed by testator; (b): intended to be given effect by testator; (c): witnessed + attested by 2 or more witnesses.
- Justifications.

1. fraud theory: fraud vs. settlor if t. keeps gift (McCormick v Grogan) - but does not work for HST.

2. dehors the will theory: trust declared inter vivos, merely constituted on death (Blackwell v Blackwell).
- Proof: burden on person claiming trust; standard: balance of probabilities (Re Snowden).

1. Identify type: Fully Secret Trust or Half Secret Trust?

- FST: apparent outright gift to intended t. if intention not communicated: absolute gift. if intention communicated but trust fails: RT.
- HST: gift in will to t. 'on trust', but terms not specified. if trust fails: RT.

2. Requirements: i. Intention; ii. communication; iii. acceptance by t.; iv. reliance by testator (Kasperbauer v Griffith).

- Communication. Content (mirrors 3 certainties: deal with at same time). a. fact/existence of trust (Wallgrave v Tebbs: orders to hold on trust not given before death ? took free). certainty of intention (Kasperbauer v Griffith: 'wife knows what she has to do' ? too vague). b. terms of trust (Re Boyes: testator failed to give promised instructions before death ? RT). c. property subject to trust. Re Colin Cooper: addition of PS5k by codicil to existing 5k ST not communicated ? RT of 2nd 5k. Marguiles v Marguiles: proportion of property unclear ? RT. Method (Re Keen) generally: oral/writing. sealed envelope opened on death IF t. aware (Re Keen, [Ld Wright]: cf. ship sailing under sealed orders). Timing FST: any time before death (Wallgrave v Tebbs) - unless Re Stead exception applies (see below). HST: before/at time will executed (Re Keen; Re Bateman) + must be consistent with will (Re Keen). rationale: prevent testator bypassing s9 Wills Act (Blackwell v Blackwell, [Vis Sumner] obiter). To Whom?
general rule: all trustees. if not: only those to whom communication made bound (Wallgrave v Tebbs; Moss v Cooper). FST: if not communicated to 1 ? takes share absolutely. HST: if not communicated to 1 ? holds on RT for settlor. exception for FST: bequest to joint tenants if comm. to 1 before will executed (for FST) (Re Stead).

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