Class notes
PQ on express private trusts
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QUESTION 1:Freddie was very rich. He was also obsessed with the idea that he was dying but was
actually in very good health. Having made generous provision for his family in March
2015, he;
a) handed over the (non-bearer) share certificates of his shareholdings in the Grace
company to Harry saying "hold these shares on trust for Iona" and Harry agreed to do
so;
b) covenanted with Jerry to transfer to him £100,000 to be held by him on trust for Ken
but nothing has yet been transferred to Jerry;
c) handed the only key to his safe to Locke saying to him "I'm not going to live long. I
want you to take the £100,000 cash in my safe and the title deeds to my mansion which
are there too. You are to keep £20,000 of the cash for yourself and hold the rest of it on
trust. I shall tell you for whom in due course. And you are to hold the mansion on trust
for Marie". Locke replied "OK, if that's what you wish".
Before doing anything further, Freddie was struck by lightning and killed in April 2015,
dying intestate.
Jerry is Freddie's sole administrator and next of kin.
ANSWER:
1. Freddie was very rich. He was also obsessed with the idea that he was dying but was
actually in very good health. Having made generous provision for his family in March
2015. Before doing anything further, Freddie was struck by lightning and killed in April
2015, dying intestate. Jerry is Freddie's sole administrator and next of kin.
Intro: to have express private trust u need capacity, three certainties, and then formalities
and constitution.
Formalities: if a trust is for land:
- Writing
- In a deed
- Signed
- LPA 1925 section
Formalities if it is not land:
, - The three certainties
Structure:
Sui juris? Yes, then Three certainties? Yes, then Fully constituted? No? any exceptions.
THE EXCEPTIONS: Contract, proprietary estoppel, strong v bird, DMC.
a) He handed over the (non-bearer) share certificates of his shareholdings in the Grace company
to Harry saying "hold these shares on trust for Iona" and Harry agreed to do so; obsessed
with the idea that he was dying but was actually in very good health
Is Freddie capable of creating this trust? (sui juris) Is he of suitable age and mind. Mind might be
disputed; how did he know he would die? but not sufficient to establish mental illness so ignore
it.
Three certainties: knight v knight (first from wright v atkyns) – since its shares and not land the
only formalities you need are the 3 certainties.
- Intention clearly shown from conduct and words. Titcombe v ison. No use of precatory
words.
- Subject matter was given to the trustee. Those specific certificates are clearly identified
but it is non-bearer so not properly constituted. The certificates are non-bearer meaning
the one that has them physically does not own them. The property will not vest.
- Object depends on whether there are multiple Iona’s in the family.
Must be properly constituted (re rose, re fry). Property must be transferred to the trustee. This is
done by the settlor transferring title to someone else as a trustee, themselves, or both.
An exception to the strict rule here (everything not being done well) is DMC. It will apply here.
Form of transfer being handing the certificates.
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