Trusts - Head 2

Creation of a Trust

capacity and transfer - age

• Age of Legal Capacity (S) Act 1991 

  •  Inter vivos: s.2(1) = 16 years of age 

  • Mortis causa: s.2(2) = 12 years of age

capacity and transfer - faculties

• Boyle v Boyle’s Excr 1999 SC 479 

Sivewright v Sivewright 1920 SC (HL) 63

capacity and transfer - property

Joint administers of Rangers Football Club PLC, Notes 2012

• the trust must be constituted by property which is amenable to transfer, which means that it must be existing property capable of being the object of ownership

• administers asking advice of whether particular arrangement for the club to sell season tickets and whenever they received payment wold hold under trust patrimony. however, these tickets were for future seaosns and did not yet exist.

• in practise, often an initial transfer of some property.

capacity and transfer - formalities, writing

• For mortis causes: yes RoW Act s.1(2)(c)

• For inter vivos: no, RoW Act s.1(1)

  • However they will almost always be in writing

capacity and transfer - formalities, registration

• No legal requirement as a matter of validity to register a trust though in practise most trusts are in some way registered and certain types of property transfer require registration

• Some are rather recorded due to different areas of law, such as mortis causa trusts as they are recorded when submitted to the  sheriff court during the executor confirmation process. 

• Large value trusts may be recorded in the books of council and session.

Formalities - word trust necessary?

Macpherson v Macpherson’s CB (1894) per Lord McLaren

• Our law requires no special or technical words in order to constitute a trust, if there is an appointment of a beneficiary and if some person is charged with the administration of the funds beneficially destined, we have the essentials of a trust. If there is a clear indication of a trust to be constituted it is immaterial whether the words “in trust for” or “for the benefit of” of “for behoof of” or other similar words be used

Formalities - word trust sufficient?

Balfour Beatty Ltd v Britannia Life Ltd 1997 SLT 10, at 18K-L per the Lord Ordinary Penrose

However it is abundantly clear on the authorities down to and including tay valley that scots law does not recognise the validity of a trust simply on the basis that those responsible for the constituent documents use the language of trust as a matter of drafting.

Truster as trustee trust

• Where a truster declares that he is holding property on trust fo another person. 

• Must be in writing 

  • RoWA 1995, s.1(2)(a)(iii)

• Intimation of the trust to beneficiaries seems necessary

• Done by taking out the 3rd party trustee, intention for beneficiary to benefit is there and declaration is made to reflect as such. 

  • Beneficiary has right against truster/trustee

• It is intimation which creates the trust

Intimation of the trust to beneficiaries seems necessary 

Allans Trs v Lord Advocate 1971 1SC (HL) 45,

A person can make himself a trustee of his own property provided that he also does something equivalent to delivery or transfer of the trust fund.

Intimation of the trust to beneficiaries seems necessary

Clark Taylor & Co Ltd v Quality site Development (Edinburgh) Ltd 1981 SC 111

There must also be delivery of the trust deed or subject of the trust or a sufficient and satisfactory equivalent to delivery, so as to achieve irrevocable divestiture of the truster and investiture of the trustee in the trust estate.

specialist forms of creation - implied trusts

Where the trust is made out by the context and circumstance, but crucially still referable to the intention of the truster

specialist forms of creation - resulting trusts

when a trust’s purposes have been satisfied or have failed and there is remaining trust funds. to be held for the benefit of the truster or his successors

specialist forms of creation - constructive trusts

a trust which the law imposes upon someone in particular circumstances

specialist forms of creation - statutory trusts

• A trust can be created or imposed via statute 

• E.g Conveyancing and Feudal Reform (S) Act 1970 s.27

Appointing the trustees - original trustee

will be appointed in the trust deed, and who take joint ownership of the trust property - not a pro indisivo share - upon its traansfer to them from truster

Appointing the trustees - new trustees, trust deed

trust deed may provide specific rules to govern when and how new trustees can be assumed

Appointing the trustees - new trustees, default rules

• Trusts & Succession (s) Act 2024

  • S.1 court

    • Necessary for administration of the trust or no trustees

  • S.2 truster

    • Defaut power where there is no trustee

  • S.3 trustees

    • Default power if no trust deed provision

ex officio trustees

• A specialised type of trustee which is where a particular office or role is appointed as trustee rather than an individual person 

• UofE v The Torrie Trs 1997 SLT 1009

  • Where the ex officio trustees were the Lord Provost of Edinburhg and the sheriff Principal of Lothian and Borders

• Escape? 

  • Trust and Succession (s) Act 2025

  • S.66 appointment of trustee to take place of the ex officio trustee 

S.67 removal or replacement of the office