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Chapter 03 Select the Correct Answer Exercise 3.03

You have recently started a new job as senior trust manager at Umbrella Trustees Ltd (“Umbrella”) and your director has asked you to review a serious complaint relating to The Clarking Trust, which has a substantial investment portfolio currently valued at £2.2m. The settlor, Bob James, is demanding that the trust funds are repaid to him, claiming that the trust was not properly constituted at creation. He claims that it was only set up to shield his assets from an acrimonious divorce which is now settled, so th e funds must be returned immediately. You are asked to review the file and draft a report for the Board. The report should discuss the factors required to establish a valid trust for Bob and analyse the circumstances in which a trust is void or can be voided. Your report should also evaluate the specific criteria to be met if the trust is to be legitimately unwound without a breach of trust law occurring. (25 marks)

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