This is an extract of our Types Of Trusts And 3 Certainties document, which we sell as part of our Trusts and Equity Notes collection written by the top tier of Oxford students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Trusts and Equity Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
TYPES OF TRUSTS/POWERS
1. Fixed trust - trustee must give property out to the named objects + has no discretion as to how it's to be distributed
2. Discretionary trust - trustee must give property out to the named objects + has discretion as to how it's to distributed
3. 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
4. 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.
? All imposed trusts will be fixed but when it comes to intended ones, it can be any. It's for settlor to choose which option he wants and, when language is ambiguous, for courts to determine which of these best mirrors settlor's intent. THREE CERTAINTIES 1) Certainty of Intention
Shad to express intent(could be collected from docs) to create a trust by name or set of arrangements equating to a trust ? court will not impute such intent w/out any indication(Re Schebsman).
Precatory words alone [?] intention e.g. request that T 'do what's right'
Moral obligation [?] fiduciary obligation o in full confidence that mother will look after the children' (Re Adams & Kingston Vestry)= no trust o in full confidence that 'wife will devise property to husband's nieces as fit' = a trust
is mother different from aunt?
o 'to be disposed of in any way wife may think best for benefit of her & family' = no trust (Lambe v Eames) o property 'is as much yours as mine' = a trust (Paul v Constance)
Intent to make a gift[?] intent to create a trust (Jones v Lock- the case of father, baby & the cheque). 2) Certainty of Subject Matter
Must have intention + physical capacity to transfer (Re Ellenborough)
Can't transfer property of which you have only expectancy or assign yourself as trustee over it (Williams v IRC - couldn't assign expected income)
Property which isn't presently owned can't be impressed with a trust or effectively assigned (ReLondonWine)
Trust property has to be distinguishable from the general mass (Re London Wine/Re Goldcorp- wine & gold bullion cases), except for intangibles (Re Harvard Securities/Hunter v Moss - shares)
Lehman Brothers (intangibles) - the test is whether, immediately after declaration of trust, court couldmake an order for execution of the trust. A declaration re definite number of shares, forming part of larger holding, was valid, just as a declaration re corresponding proportion of shares held would have been
A trust for 'whatever is left' (a floating charge) is valid (Ottaway v Norman) despite inherent uncertainty as to what will be left ? NB: recognised in context of secret trusts so unclear if it applies generally
? Can achieve same result by giving T a life interest in the property w/power to dispose of it then, B being entitled to the remainder 3) Certainty of Objects
1. Fixed trusts - property is to be held equally for certain class of people such that it's necessary to know how many, where & who b/f the trust can be administered i) Independent/freestanding fixed trust (B's interest is defined as distinct from those of others - e.g. PS100 to each of my friends) - C must establish that he falls within the class set down by settlor
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