Lecture notes
Law notes: Lecture on Equity and Trusts
- Module
- Equity And Trust
- Institution
- City University (City)
Law notes: Lecture on Equity and Trusts
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Revision notes: Lecture 2:Equity will not perfect an imperfect gift or will it?
Express trust This is where the legal owner of the property declare that they hold the
property on trust for specified beneficiaries.
The declaration sets out the proportion or ways in which they are to hold
the beneficial interest.
Express declaration This will override the principles of resulting or constructive trusts unless
the declaration was obtained by fraud or mistake.
Inter Vivos Trusts that are created while an individual is still alive in order to name the
beneficiaries of property and assets upon death while avoiding probate
(dealing with the estate of someone who has died.
Milroy v Lord 1862 Case:
Facts: Thomas Medley helf shares in the bank of Louisana (Bank)
The bank required that the shares be transferred according to
regulations in the company constitution.
Thomas wanted to give to his niece, Eleanor Milroy
He signed a deed with Samuel Lord, Lord would 50 shares on trust
for Eleanor
He also gave Lord a power of attorney to receive dividends on the
shares and to comply with the company constitutions
requirements. Lord did not do this.
No transfer of the shares into Lord’s name has been made.
Thomas lived for three years after signing the deed with Lord.
During these three years, Samuel Lord was receiving dividends and
passing them on.
When Thomas died the shares still remained in his name. Eleanor
claimed that the shares belonged to her. Lord claimed that the trust
was ineffective.
Issue:
Was Lord in breach of trust?
Held:
The transfer of trust property was not effective
No prefect trust had been created
Thomas did not properly transfer the shares
An ineffective outright transfer could not be regarded as an
effective declaration of trust
In order for a trust to be valid, the settlor needs to do everything
which is necessary to transfer the trust property and make the
settlement binding. Thomas had not properly transferred the
shares.
Principle: this case was based on held trusts should not be used to save
gifts from being defeated. It purported to follow one of the maxims of
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