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LPC Law Notes Private Client Notes

Types Of Trusts Notes

Updated Types Of Trusts Notes

Private Client Notes

Private Client

Approximately 235 pages

A collection of the best LPC Private Client the director of Oxbridge Notes (an Oxford law graduate) could find after combing through twenty-nine LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".

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The following is a more accessible plain text extract of the PDF sample above, taken from our Private Client Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

TYPES OF TRUSTS

What is a trust?

  • The terms upon which ‘settled’ property is held

  • Settlement = any arrangement whereby an individual ‘settles’ property of any kind upon trust for a beneficiary or beneficiaries

  • Fiduciary arrangement enforceable by beneficiaries imposing strict obligations on trustees in which beneficiaries have limited interest (except in bare trusts)

  • Four main categories of trust:

Interest in Possession Trusts

  • IRC v Pearson (1980): “a present right to the present enjoyment of income”

  • Essential feature: there is a beneficiary within the trust who has the right to call upon the trustees to pay the income of the trust to them

  • e.g. life interest – for example, if a trust is set up “to A for life remainder to B”, A has a life interest and B has an interest in reversion

  • Main aim is setting up an interest in possession trust is to restrict or postpone a beneficiary’s entitlement to receive the underlying capital

  • Can create successive interests:

    • e.g. to A for life, remainder to B for life, remainder to C absolutely

    • e.g. all income to go to A for 10 years or until he qualifies as a solicitor and then the remainder to B

    • by giving one person the right to receive income immediately, but postponing the right to receive the capital until a later date

Non-Interest in Possession Trusts

  • Where there is no person with a present right to the present income of the trust – no one with a right to demand that the trustees pay the income to them

  • Discretionary trust = most common type – settlor will identify the beneficiaries whom they wish to benefit from the trust, but will leave it to the discretion of the trustees as to precisely which of them is to benefit, when and by how much

Bare Trusts

  • Where a person holds property in trust for the absolute benefit and at the absolute disposal of other persons who are of full age and sui juris in respect of it

  • The trustees will have no duties to perform in respect of the...

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