Lecture notes
The 3 certainties
- Module
- LAW3103
- Institution
- Middlesex University (MDX)
a guide on what the 3 certainties to create a trust are
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Seminar – the three certaintiesHandbook page 45
Before a private express trust can be valid, it must meet certain conditions. The
conditions are:
• The settlor must have legal capacity to create the trust.
• The ‘Three certainties’ must be satisfied.
• Any formalities that may apply depending on the nature of property, must be
met and;
• The trust must be properly constituted.
The three certainties.
- The requirement was first declared in Wright v Atkyns (1823) Turn &R by Lord
Eldon at [143]
- Confirmed by Lord Langdale in Knight v Knight (1840) 3 Beav 148, 173
They are:
1. Certainty of intention:
For the trust to be valid, the settlor must have intended to impose a legal (as
opposed to a mere moral) obligation to act and deal with the property in accordance
with the trust instrument. It must also be clear that a trust has been intended and not
something else such as loan, sale or a direct gift.
Settlor intends to have legal consequences on the trustee if he doesn’t uphold his
wishes.
IMP: We have this to upheld the intention of the settlor.
IF NOT: Precatory words or words that don’t show intention, then there is no
intention, then we cant really move forward with the trust.
2. Certainty of subject matter
The precise property needs to be clear but also, in fixed trusts, the extent of the
beneficial interest needs to be clear.
Also, subject matter includes the share of the beneficiaries – Boyce v Boyce
EXCEPTION: reasonable income.
3. Certainty of Object
A trust has to be for ascertainable beneficiaries as the trust needs to be enforced in
their favour by the courts, if necessary. - Morice v Bishop of Durham (1804) 9 Ves Jr
399.
Mention administrative unworkability.
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