Q1 Equity and Trusts

Trusts and Wills

  • Key Concepts

    • The law of trusts involves various principles, including the three certainties and the distinction between charitable and non-charitable trusts.
    • Three Certainties:
    • Certainty of Intention: The testator must clearly express their intention to create a trust.
    • Certainty of Subject Matter: The assets that the trust will hold must be clearly defined.
    • Certainty of Objects: The beneficiaries of the trust must be clearly identifiable.

  • Wills and Testamentary Trusts

    • A will is a legal document that outlines how a person’s estate will be distributed after their death.
    • A testamentary trust is a type of trust that is created as part of a will.
    • Comes into effect only after the person's death and after probate is granted.
    • Governed by the Wills Act, notably Section 9, which outlines the requirements for creating a valid will:
    • The testator must demonstrate the intent to create a will through clear wording.
    • Mental capacity at the time of making the will is essential.
    • The will must be witnessed by two individuals.

  • Creating a Trust

    • Trusts must comply with the three certainties to be valid.
    • Willful intent must be clear, and the subject matter must be specific to ensure that the trust operates as intended.
Analysis of Specific Cases

  • Case References:

    • Adams v. Kensington Vestry: Discusses validity based on intentions and language used in the will.
    • Norfolk v. Wilkins & Re Cape: Address the ambiguity in wording and the intentions behind trust creation.
    • Strange v. Bernard: Involves issues of certainty of subject matter within trusts.
    • Hindcastle v. McDonald: Highlights distinctions between tangible and intangible property regarding trust creation.
    • Re London & Re Goldcup: Establish that tangible objects must be distinctly delineated to create a valid trust.

  • Certainty of Intention and Subject Matter

    • Importance of using definitive language in wills to avoid ambiguity.
    • Discrepancies in how courts view tangible vs. intangible trusts.
    • Loose phrasing can invalidate a trust unless the intent can be clearly established.

Non-Charitable Public Trusts

  • Non-Charitable Purpose Trusts

    • Can face validity issues, particularly if they don't align with the established criteria for non-charitable trusts.
    • Examples of valid non-charitable trusts are rare and generally deal with specific exceptions.

  • Discretionary Trusts

    • Defined by the flexibility given to trustees in producing distributions to beneficiaries.
    • Governed by the 'is or is not' rule established in cases such as MacPhail v. Dalton.

  • Legal Implications

    • For trusts involving subjective criteria for beneficiaries, courts may reject these trusts unless strict definitions can be provided.
    • Special rules may apply to the transfer of pre-existing equitable interests and property in a will versus living disposals.

Conclusion

  • Formalities in Trust Creation

    • Vary depending on whether the trust involves personal property or land.
    • Must adhere to statutory requirements outlined in the Law of Property Act (LPA) 1925, specifically Section 53 on dispositions.
    • Additional requirements may exist for declarations concerning interests in land, necessitating a single document outlining all terms of the trust.

  • Recommendations for Exam Preparation

    • Understand key case law and principles for creating valid trusts.
    • Engage with recent legal literature to enhance arguments and critical analysis skills.