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Law Notes Trusts and Equity Notes

What Is A Trust Notes

Updated What Is A Trust Notes

Trusts and Equity Notes

Trusts and Equity

Approximately 1016 pages

Equity notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB trusts cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

These were the best Equity and Trusts Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest re...

The following is a more accessible 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:

What is a trust? Medieval Roots Early medieval period, practice arose of owners of property transferring that property to third parties to the use either of the owners themselves or of some other person who was intended to benefit Effect was that the law regarded the third parties as the owners of the property The problem was that in the event that the 3 rd party failed to comply with the terms of use, neither the transferor nor any other intended beneficiaries had any remedy against them in the Royal courts In these circumstances, a complaint could be made by way of petition to the king in council - initially the practice of the council was to instruct its principal minister, the chancellor to investigate the matter and recommend an appropriate remedy, but in due course, the quantity of petitions led to the establishment of what became known as the Court of Chancery The law developed in these courts became known as the rules of Equity, of which trusts were the principal institution Originally, the uses of trust were of a temporary nature. When a freeholder wanted to transfer land to a third party, he had to first transfer it to his feudal lord so that the latter could make the appropriate feudal grant to the transferee There are also examples of crusaders transferring their lands to third parties to hold for them until they returned or for their rightful heirs in the event that they did not It soon became realised that trusts could be used on a more permanent basis Until 1540, all freehold land automatically descended to the heir of a deceased person - it was impossible to make any alternate disposition by will This could be circumvented by a landowner transferring trusts to third parties during his lifetime - they would hold the land to the use of the transferor for the rest of his life and thereafter for the use of the intended beneficiary Uses were most frequently employed in the medieval period for the purpose of avoiding feudal inheritance taxes The feudal lord would be able to use the land for his own exclusive benefit until a minor heir reached the age of majority- major problem in era when there was low life expectancy Liability not unreasonable, given that it compensated the feudal lord for the inability of a minor heir to render him the services in exchange for which the land had originally been granted - however, but 14th century, owing to inflation these services were no longer worth collecting Henry VIII, with the Statute of Uses in 1536 sought to end the practice of avoiding such inheritance practices by using trusts - this was largely bypassed by the Statute of wills 1540, but remained in force until 1925 In the 18th and 19th centuries trusts were employed by wealthy landowners in order to tie up wealth for the benefit of succeeding generations - the land was vested in the eldest son of each generation, but the trustees of the settlement were given overriding powers to raise capital for the benefit of other members of the family Trusts were also used to get round the rule that a married woman could not hold property in her own right during the marriage, by vesting her property in trustees to hold on trust for her Trusts also played an important role in the development of societies, clubs and unions in the 19 th century, as such bodies were not legal entities and could not hold property on their own behalf - trustees had to do this for them The trust today Can be classified as: family, commercial or social, but many fall into more than one Family: 1. To enable property (particularly land) to be held for persons, such as minors, who cannot themselves hold it 2. To enable a person to make provision for dependants privately, i.e. for a man to his mistress, or to his illegitimate child - a will becomes a public document once probate has been obtained 3. To tie up property so that it can benefit persons in succession - a gift of property to trustees can ensure that it is passed on to children; although the original trustees may sell the property, they are nonetheless bound to pass on the proceeds to the intended recipients 4. To protect family property from wastrels. A gift of money to trustees, who will pay an income to an frivolous relation may be preferred. Alternatively, property may be given to trustees to hold such that it will be preserved from the beneficiary's creditors in the event that he becomes bankrupt 5. To make a gift to take effect in the future in the light of circumstances which have not yet arisen, i.e. giving money to trustees to hold on behalf of 3 daughters, but with discretion to distribute as they see fit, with reference to whether daughters have attained financial security/ become married etc 6. To minimise the incidence of income tax, capital gains tax and inheritance tax. 7. To enable two or more persons to own land. It is a feature of English land law, that if two or more persons wish to own land jointly, they cannot be the absolute legal and beneficial owners of that land - up to four may be legal owners, but all beneficial interests have to take effect behind a trust 8. To facilitate investment through unit trusts and investment trusts. These enable an investor to acquire a small stake in a large portfolio of investments, and to spread a risk across a substantial range of stocks and shares. a. In a unit trust, the promoter of the trust invites the public to subscribe for units of a fixed initial value. The funds are then invested in the stock market, either generally

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