notes based on Barbri prep course and external resources - summary of UK trusts law in preparation for SQE1 FLK2
in notes:
T = trustee
S = settlor
B = beneficiary
K = contract
Rmanner = reasonable manner
RT = resulting trust
CT = constructive trust
Trusts
Key Concepts:
1. Express and implied trusts
2. The fiduciary relationship
3. Trustees’ duties, powers and liability
4. Equitable remedies
Trust = fid rshp where T holds legal title to specific property under duty to manage for benefit of B who holds benf
title
- Express or Implied
- Implied = RT or CT
- Express = inter vivos or testamentary → private or charitable → if private: fixed, discretionary, or purpose
Public = charitable - tax advantages Private = NCPT
Express Trust = clear intention expressed by S
a. Private Trust = for benefit of ascertainable human Bs - can be:
- Fixed: defined interests - ex. divided equally
- Discretionary: has discretion on distribution
- Purpose: abstract purpose normally fails unless honorary or Denley trusts
b. Charitable Trust = purpose - indefinite class or public
Implied Trust = presumed in equity for fair result
a. Resulting Trust = if express trust fails OR express trust fails to exhaust interest OR voluntary transfer in
name of another → benf interest reverts to S
b. Constructive Trust = prevent unjust enrichment when assurance, reliance, detriment with wrongful
conduct, fraud, breach fid duty
Income = $ generated from trust - arising or accumulated
Capital = assets forming trust property
1
, Express Trusts Requirements
Need 3 C’s, Declaration (for S as T or 3P T), Constitution (if S is not T), Human Bs, RAP → if lacking any then trust
FAILS
3 certainties of intention, subject matter and objects:
○ fixed interest trusts
○ discretionary trusts
formalities to create express inter vivos trusts
constitution of express inter vivos trusts and exceptions to the rule that equity will not assist a volunteer
1. Certainty of - Words or conduct to show intention of binding ‘in full confidence’ w. detailed
Intention obligation instxns = suff
- Need signed writing for land
If fails for intention - S must have intention whilst owning the property at ‘money is as much your
goes to T outright money as it is mine’ = may
time of trust creation
suff in context of joint bank
- S must intend trust to take effect immediately account
- Precatory language insuff - hope, wish, suggestion -
UNLESS words are in binding legal document like deed
2. Certainty of - Valid if objectively defined (Rincome = suff) bulk of my estate = fails
Subject Matter - Entitlement (share) must be defined too
- Share of intangible assets (share) needn't separate to X the house i expect to
If fails for SM reverts - Share of tangible assets (wine in warehouse) must inherit from mom = fails
to S separate to have certainty
- Must be existing interest - expectation interest insuff
3. Certainty of - Bs must be defined with suff certainty by name or my friends = insuff
Objects concept capable of objective determination
- Fixed trust → COMPLETE LIST TEST my exes = suff for
If fails for objects RT - Bs named or described so that T can make discretionary trust
for S complete list with conceptual (description) AND
all or some ppl of Yorkshire =
evidential (proof by records) certainty too wide to make workable as
- Trust w.n fail if B known but c.n locate discretionary trust (2.5mill
- Trust fails if c.n form complete list ppl) = fails
- Discretionary trust → GIVEN POSTULANT TEST
- Description is clear enough to so can say any
individual is in/out of the class - needn't establish
whole range of Bs, suff to know what the range is
- Need conceptual certainty
- Trust fails is administratively unworkable - too
many potential Bs to form a class OR nothing to
link members of class to enable T to decide
distribution
4. Beneficiary - Must be ascertainable human Bs unless charitable trust trust to preserve freedom of
Principle or honorary trust press = fails since no B to
If fails RT for S - Need person to be able to enforce trust enforce
5. Trustee - Inter vivos = must have at least 1 T
- Testamentary = w.n fail for lack of T
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