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Law notes: Lecture on Equity and Trusts
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Law notes: Lecture on Equity and Trusts
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Revision NotesTrusts & Equity: Lecture 1
A trust allows more than one person to own a property. There is a trustee who is the legal
owner, the beneficiary who is the equitable owner.
The trustee holds the legal ownership of the property, and the beneficiary has a beneficial
interest in the property.
Express trust Created by the “settlor”, who transfers property to a
trustee for a valid purpose.
The settlor is the owner of the property which is
settled onto the terms of the trust.
When the trust is created by the settlor, the legal
title in the property which is settled on trust passes
to the trustees.
Resulting trusts Implied by court, they are not created intentionally
by the settlor. Resulting trusts arise in two situations:
1. Westdeutsche Landesbank Girozsentrale v
Islington LBC; where the settlor has
transferred the legal title in property to a
trustee but has failed to identify the person
who will take the equitable interest in the
trust property, that part of the equitable
interest in the trust property, that part of the
equitable interest which has not been settled
on trust for an identified enficiary will be held
by the trustee on a resulting trust for the
settlor.
2. Where a person contributes to the purchase
price of property, that person acquires an
equitable interest in the property. The size of
the equitable interest will be equal to the size
of the contribution in proportion to the total
purchase price of the property. Therefore, if a
person contributes 20,000 to the purchase of
an asset which cost 100,000, that person
would acquire an equitable interest equal to
20 per cent of the value of that property on
resulting trust principles.
Constructive trust This trust arises by operation of law, that means they
are implied by the court when the circumstances are
considered appropriate. There is no settlor who
intentionally creates a constructive trust. When a
defendant has knowingly acted unconsciously in
taking property into their possession then the
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