PASSING OF TITLE
Depends type of property,
Intentionally declared trust
unexpressed but presumed intention of
the settlor
arises by operation of the law where =
unconscionable for a trustee to deny
the beneficial interest of another
person (B) in the asset.
FT = Terms = clear => duty + no exercise of
discretion
EG 1: “I give my estate to my trustees on trust
for my wife Doris for life, and then for my 3 children,
Apple, Blossom and Curley in equal shares”
DT = duty + discretion (beneficiaries : who, what,
when and how much)
EG 2: “ My estate on trust to Doris for life, then
to my children in such shares as my Tees shall in their
absolute discretion think fit”
- CCT = when the trust property = properly
vested in the trustee (benefs can only claim this)
Completely Constituted Trusts v Incompletely
- ICT = The task of vesting the property to the
trustee remained to be done are didn’t made
properly
Subtopic 1 Private Trusts v Public Trusts v Purpose Trusts
ex: share (company rule), book, land (property law)
ENFORCEMENT
If mentioned that giving as a trust = enforceable
(Gift = owner / Trust = Holder for someone else)
Equity will not assist a volunteer
TRUSTS V GIFTS
CONSIDERATION
Gift = no consideration bc other person = just a
volunteer
SETTLOR
Similarities
TRUSTEE - Fiduciary relationship
THE PARTIES - Neither they can delegate responsibilities
BENEFICIARY - Profits must be turn back to the third party
Differences
Preservation and distribution of wealth - Agent = representing the princip – hold no legal
title
- Trustee = holder of a legal title + doesn’t
Family wealth settlements TRUSTS V AGENCY represent the beneficiary
- Agent or Pr = died => end of the relationship
Commercial securitisation of debt USES OF TRUST - Death of the trustee : Courts of Equity will not
permit a trust to fail for want of a trustee.
Charitable trust
- Bailor/Bailee (ex : coat night club)
UNDERHILL ON TRUSTS - Possession not Ownership ( cond : deliver back)
TRUSTS v BAILMENTS
4 Significant features:
1)it is equitable Origin
2) it provides beneficiary with rights in the Trust = Equity
property; Contract = Common Law
3) it imposes obligations on the Trustee;
4)those obligations are fiduciary in nature`
Thomas & Hudson, Law of Trusts Consideration
Contract = valuable consideration
But in trust = can have a valid trust without a
consideration if it’s completely constituted
Moreover : Who can enforce it?
- Can be created intentionally or by operation Contract = contracting parties
of the law Trust = settlor, trustee but also and third party
- Obj transfer of rights of enjoyment and TRUST LAW TRUSTS V CONTRACTS (the beneficiary)
stewardship of the settlor
- Trustees (unless also benefs) must not have
any personal interest in the trust property
Proprietary v personal obligations
- Legal duty on the trustee to act in a
particular manner towards benefs
Trust = Proprietary right
Ex : case of insolvency, trustee = creditor no possible
property
Contract = Personal obligations
Express Trusts
Resulting Trusts CLASSIFICATION OF TRUSTS Mere power (or power of appointment)
- Donor/Donee
It determines the scope and nature of the legal title
Constructive Trusts holder’s obligations to the equitable title holder. - Trust = an imperative, a commandment / Power =
is discretionary, so can choose to exercise it but
not an obligation (right without a duty)
- Death of donee : end bc particular to the person
EG 3: “Estate on trust for Doris for life, then to children in equal shares, with power to
my trustees to appoint up to half the capital during my W’s lifetime to such of my
Fixed Trusts v. Discre Trusts
children and in such amounts as they shall in their absolute discretion think fit” [mere
power with Tee]
Power holder may be Trustee or power could lie
Powers /contd. . . with someone else
NOMENCLATURE
EG 4: “I give my estate on trust for my wife Doris for
life, and then to my 3 children Apple, Blossom and Curley
constituted Trusts in such shares as my wife shall appoint by her will with
TRUSTS V POWERS power to my wife to appoint up to half the capital
during her lifetime to such of my children and in such
amounts as she shall in her absolute discretion think
fit.” [mere power with beneficiary]
Mere Powers v Trust Powers
“Again the basic difference between a mere
power and a trust power is that in the first
case trustees owe no duty to exercise it and
the relevant fund or income falls to be dealt
with in accordance with the trusts in default of
its exercise, whereas in the second case the
trustees must exercise the power and in
default the court will.” Lord Upjohn in Re
Gulbenkian
GP = absolute ownership for powerholder (‘donee’); D
can designate anyone, including self, to be object of
power – power to appoint to anyone in world.
General Power v Special Power SP = power to appoint to a restricted class of persons
defined by the creator (‘Donor’) of the Power and which
may include the power holder as a member. EGs 3 & 4
create special powers.