Project Log book - Mandatory coursework counting towards final module grade and classification. The Law Commission analysed the policy behind the rule against excessive accumulations and decided that the application of the current principles were disproportionate and unnecessarily complex, and ought to be abolished, except for charitable purposes, where the period ought to be modified. Resulting Trusts Cases | Digestible Notes Mrs Pearson and her co-trustee are private client solicitors . The trustee must consider: Only in investments chosen from a specific list that trustees were authorised by statute to invest trust funds. Further, a so-called Benjamin Order will permit trustees to distribute the trust property to the known beneficiaries pending the emergence of any absent beneficiaries, provided that the former will undertake to compensate the latter parri passu according to their appropriate share in the event of their reappearance. You should not treat any information in this essay as being authoritative. Dishonesty in this situation is not restrained to deceit. The deed of appointment was void as being an excessive However, the rule is also in a form of protection for the individual trustee whose considerations cannot be outvoted by a majority. The trustees are required to decide in whose favour the property (income and capital) may be distributed. The testatrix transferred property to her husband for life with power to dispose of all such property by will amongst our children. Take a look at some weird laws from around the world! When exercising their power of investment, there is legislation in each jurisdiction which sets out a list of matters to which trustees should have regard. This condition helps to reduce the level of risk which a trustee may take in his administration of trust. For discretionary trusts, Lord Wilberforces emphasis on conceptual certainty enables the operation of trusts where the class is sufficiently distinguishable from others, such as family members, though rightly disallowing woolly concepts such as friends. Looking for a flexible role? However section 3(3) of the 1985 Act provided that, subject to any condition or restriction in the instrument, an attorney under an enduring power, whether general or limited, might execute or exercise all or any of the trust powers or discretions vested in the donor as trustee and might give a valid receipt for capital or other money paid. A trust power is in substance a discretionary trust but, in form, the gift resembles a power. in the nieces and nephews living at the date of settlement all along, o If the original power of appointment was valid, the discretionary trust created by the 0000003088 00000 n The difference between the two is crucial: fixed trusts are constituted for the benefit of pre-determined individuals or classes of individuals in which each is entitled in equity to a fixed share; in contrast, in a discretionary trust it is within the gift of the trustees to allocate the distribution of trust property among a defined class of beneficiaries, or even on occasion to decide on the membership of a class of potential beneficiaries. In this case the clause entitling Mr X to a beneficial interest is an express gift over in default of appointment. Certainty of Intention and Subject Matter Flashcards | Quizlet 0000000636 00000 n [42] The final device is to give the trustees the power to give trust property to "anyone in the world" or to "anyone whom the trustees consider appropriate". It is clarified that he meant unjust to an opposing trustee who on practical grounds favoured a retention of the requirement of unanimity. So, consultation of the settlor, implementation of settlors wishes or requirement of settlors consent to a particular course of action will not be needed if there is absence of express provision to the contrary. These were listed by Megarry VC in Re Hays Settlement Trust [1982] 1 WLR 202, as a duty to consider periodically whether or not the power ought to be exercised, a duty to consider the range of objects of the power and a duty to consider the appropriateness of individual appointments. As has been pointed out, it is a matter of degree, and it is only when one reaches, on the evidence, a conclusion that it is so vague or that the difficulty is so great that it must be treated as virtually incapable of resolution, that one is entitled, to my mind, to say that a gift of that nature is void for uncertainty". 0000000979 00000 n The trust was managed by the bank. Indeed, there is general agreement in case law on the invalidity of trusts that are constituted in order to achieve an abstract purpose and which may therefore confer no benefit on identifiable human beneficiaries; whereas trusts that identify specific individuals as beneficiaries will be deemed valid. Disclaimer: This essay has been written by a law student and not by our expert law writers. If the donee of the power fails to exercise his discretion the court will ensure that the discretion is exercised in favour of the objects. The decision avoided the ridiculous prospect that such potential beneficiaries could prostrate themselves before a court emphasising their attachment to the settlor in order to enrich themselves. Even though they had never indicated a desire to create a trust, their intention had been in line with the purpose of a trust, and thus it was considered valid. because the subject matter was potentially different, while all of Mosss A brief explanation of the beneficiary principle, which operates alongside (and complements) the law on certainty of objects, is a useful starting point in critically evaluating the operation of the law. Sachs LJ took the approach that the burden of proof was on the claimants to prove they were beneficiaries, not on the trustees to prove the trust was valid. _ ,v Elsewhere, the courts have refused to enforce trusts that are practically, or administratively, unworkable such as those trusts purporting to nominate a class of individuals that is simply too wide. trusts - British and Irish Legal Information Institute Trust disputes the trustees perspective in Private Client Business (1998) 3, 127-140, Wilson, S. Textbook on Trusts (10th ed, OUP, 2011), Sarah Wilson, Textbook on Trusts (10th ed, OUP, 2011) 66, Alastair Hudson, Equity and Trusts (7th ed, Routledge, 2013) 199, Leahy v Attorney-General of NSW [1959] AC 457, A. J. Oakley, The Modern Law of Trusts (9th ed, Sweet & Maxwell, 2008) 43, Jill Martin, Modern Equity (18th ed, Sweet & Maxwell, 2009) 107, Alastair Hudson, Understanding Equity and Trusts (4th ed, Routledge, 2013) 44, This is derived from the decision in Re Benjamin [1902] 1 Ch 723, Watt, G. Cases and Materials on Equity & Trusts (8th ed, OUP, 2011) 255, I. M. Hardcastle, Administrative unworkability a reassessment of an abiding problem in Conveyancer and Property Lawyer (1990) Jan/Feb, 24, John Wood, Trust disputes the trustees perspective in Private Client Business (1998) 3, 127. The Chief Rabbi in London was designated to decide any question as to who was an approved wife and whether the separation was due to the fault of the baronet. This duty of the trustees towards their beneficiaries is paramount. It can be written, oral, by conduct. Take a look at some weird laws from around the world! A number of fiduciary duties are imposed on the appointor. In this case the clause entitling Mr X to a beneficial interest is an express gift over in default of appointment. HWr8}W! In fact, the third party (the Chief Rabbi) was able to adjudicate on the concept of a suitable wife, whose presence was a precondition of the trust, though this could equally have applied to a trustee rather than an external specialist. Mrs Oughtred obtained the ownership in equity by virtue of the agreement, and this view has been supported by later cases (see Re Hay's Settlement Trusts [1982]). For example, S may transfer property by will to his widow, W, for life with remainder to such of his children A, B and C, as W may appoint by will. The combined effect of s 164 of the Law of Property Act 1925 and s 13 of the Perpetuities and Accumulations Act 1964 was that the settlor became entitled to select any one (but only one) of a specified number of periods as the maximum period during which the trustees may accumulate the income. shares: Rimer QC held that since the shares were all identical, the lack of Therefore, Lord Wilberforces criteria represents an important practical qualification of the courts zeal to implement a trust if at all possible, vitiating such an arrangement where a class of persons is so hopelessly wide or capricious that a trustee or a judge would have little hope of fulfilling their obligations without running down the trust fund significantly. This is part of the "orthodox" or "strict" rule, along with Re Goldcorp. Thus in Thellusson v Woodford (1805) 11 Ves 112, the testator directed that income be accumulated during the lifetimes of his sons grandsons and great grandchildren living at his death, a direction which was held valid confined, as it was, to the common law perpetuity period. statement in relation to his 95% remaining =, Court held there was no requirement to segregate 50 shares from the total, Ds shares were indistinguishable from each other , The decision got controversial views though. In the concept of trust, it is fundamental that as a duty, a trustee performs the trusts honestly and in good faith for the benefit of the beneficiaries- there will be essence of trust in case a trustee is not obliged to act honestly for the benefit of his beneficiaries. years after the death of the last surviving niece or nephew, Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, Public law (Mark Elliot and Robert Thomas), Introductory Econometrics for Finance (Chris Brooks), Principles of Anatomy and Physiology (Gerard J. Tortora; Bryan H. Derrickson), Commercial Law (Eric Baskind; Greg Osborne; Lee Roach), Criminal Law (Robert Wilson; Peter Wolstenholme Young), Marketing Metrics (Phillip E. Pfeifer; David J. Reibstein; Paul W. Farris; Neil T. Bendle), Rang & Dale's Pharmacology (Humphrey P. Rang; James M. Ritter; Rod J. Cowan v Scargill - Wikipedia The rules on the first two certainties are relatively straightforward: there must be certainty of intention, which in substance means that that the settlor must have made it clear that he intended (rather than hoped or expected) that the trust property would be used in a certain way; and there must also be certainty of subject matter, whereby the court is able to identify the exact property that is to be the subject of the trust.