Equity and Trust Concepts Summary

Trust Concept

• Considered a significant achievement in jurisprudence (Maitland).
• Trusts create a fiduciary relationship.

Types of Trusts

• Express Trusts
• Private (benefits individuals)
• Public (charitable purposes)
• Informal and Statutory Trusts

Characteristics of Trusts

• Equitable in nature
• Fiduciary obligations
• No requirement for value to be exchanged

Trustees' Role

• Hold legal title for the benefit of beneficiaries
• Must act in the best interests of the beneficiaries (fiduciary duty)

Ownership Structure

• Settlor: Absolute owner creating the trust.
• Trustee: Legal owner with responsibilities.
• Beneficiary: Equitable owner, entitled to benefits.

The Three Certainties for Express Trusts

• Intention: Clear intent to create a trust.
• Subject Matter: Property must be identifiable.
• Objects: Beneficiaries must be ascertainable.

Consequences of Uncertainty

• Intent: If unclear, construed as a gift.
• Subject Matter: Invalid if no clear property is identified.
• Objects: Results in reverting property to the settlor if beneficiaries are uncertain.

Court Cases Influencing Trust Law

• Knight v Knight: Established the necessity of the three certainties for valid trusts.
• Mussoorie Bank v Raynor: Highlighted how uncertainty affects intention.
• McPhail v Doulton: Defined tests for discretionary trusts.

Functionality of the Trust

• Trusts separate legal and beneficial ownership.
• Essential for managing property for another's benefit.
• Can hold various forms of property (land, money, chattels).

Equitable vs. Legal Rights

• Beneficiaries have personal rights enforceable against trustees.
• May trace property to third parties, establishing rights in rem (proprietary rights).

Gift vs. Trust Distinctions

• Gifts provide absolute ownership to the recipient.
• Trusts involve a fiduciary relationship between a trustee and beneficiaries.