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W301 UNITS 7-8: CREATING AN EXPRESS TRUST

By johirst

Open University law course W301 summary 'Creating an Express Trust'

Added: April 18, 2011 19:25:44

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  • Comments (3)
  • peter.fields peter.fields Hi #baghdad, as a W301 student, fully agree -> Jo Hirst has done a brilliant job with this series! If you are trying to download, just click the download link and this will allow you to save a .xmind file. You can download the free Xmind software from this site and this allows you to print. As an alternative, if you click the popout icon (far right on the task bar above) and then right-click and select copy image, you can cut/paste into a Word doc. Good luck with the coming exam.
  • Biggerplate Biggerplate We would love to see this map added to the Mind Map library at www.biggerplate.com!
  • baghdad baghdad Very useful...can't seem to download or get printed in full page. but as a student on w301 I'm very grateful....hope you do more for us students who are so far behind we are in danger of meeting ourselves back in W200!
  • Outline

W301 UNITS 7-8: CREATING AN EXPRESS TRUST

W301 UNITS 7-8: CREATING AN EXPRESS TRUST
1 Capacity
1.1 Infants <18
1.2 Mental incapacity
2 Certainty of intention
2.1 Equity looks to intent rather than form
2.1.1 Paul v Constance [1977] 1 All ER 195
2.1.1.1 '"The money is as much yours as mine"
2.1.1.2 Was the intent to make a gift or trust?
2.1.2 Wallbank and another v Price [2007] EWHC 3001; [2008] 3 FCR 444
2.1.2.1 warned against 'unduly technical approach'
2.2 Trust words impose a binding duty on trustee
2.2.1 Precatory words do not create a trust
2.2.1.1 Re Adams and Kensington Vestry
2.3 Pre-payments and deposits
2.3.1 Re Kayford [1975] 1 All ER 604
2.3.1.1 Customer payments protected by being paid into separate trust account
2.4 Loans
2.4.1 Barclay's Bank Ltd v Quistclose Investments Ltd [1970] AC 567
2.4.1.1 Money loaned to pay dividends
2.4.1.2 Was it a loan for a specific purpose or a trust?
2.4.1.3 Held to be a two tier trust
2.4.1.3.1 Rolls Razor held on trust to pay dividends & if not paid, on trust for Quistclose
2.4.2 Twinsectra Ltd v Yardley [2002] 2 WLR 802
2.4.2.1 Money loaned to buy property, but used for other purposes
2.4.2.2 Solicitor held loan on trust for lender
2.4.2.3 Held to be a Quistclose trust
3 Certainty of subject matter
3.1 Certainty of trust property
3.1.1 'best of my land' uncertain
3.1.2 'bulk of my estate' uncertain
3.1.2.1 Palmer v Simmonds (1854) 2 Drew 221
3.1.3 Chattels
3.1.3.1 must identify which chattels from larger collection
3.1.3.1.1 Re London Wine Company Ltd [1986] PCC 121
3.1.4 Money
3.1.4.1 must segregate the trust money
3.1.4.1.1 MacJordan Construction Ltd v Brookmount Erostin Ltd [1991] BLR 1
3.1.5 Shares
3.1.5.1 Shares held to be indistinguishable so no need to segregate
3.1.5.1.1 Hunter v Moss [1994] 1 WLR 452
3.1.6 Different for wills as PR will select
3.2 Certainty of beneficial interest
3.2.1 Must be
3.2.1.1 defined
3.2.1.2 or objective formula given
3.2.1.2.1 Re Golay [1965] 2 All ER 660
3.2.1.2.1.1 'reasonable income'
3.2.1.3 or trustees to determine
3.2.1.3.1 discretionary trust
4 Certainty of objects
4.1 Applies to gifts as well as trusts
4.2 Charitable trusts are an exception
4.3 Class of objects
4.3.1 Fixed trust
4.3.1.1 Complete list test
4.3.1.1.1 IRC v Broadway Cottages [1955] Ch 20
4.3.1.1.2 Must be possible to draw up complete list of beneficiaries
4.3.2 Gift subject to condition precedent
4.3.2.1 Re Allen test
4.3.2.1.1 Re Allen [1953] 1 Ch 810
4.3.2.1.1.1 Must be possible to identify at least one beneficiary
4.3.2.1.2 Re Barlow's Will Trusts [1979] 1 WLR 278
4.3.2.1.2.1 Friends sufficiently certain for this test
4.3.3 Discretionary trust
4.3.3.1 Given postulant test
4.3.3.1.1 McPhail v Doulton
4.3.3.1.2 For any given individual, must be possible to say whether they are a beneficiary
5 The beneficiary principle
5.1 Trust must be for the benefit of ascertainable beneficiaries
5.1.1 Morice v Bishop of Durham (1804) 7 RR 232
5.1.2 Failed trust
5.1.2.1 Development of 40 letter alphabet
6 Perpetuities
6.1 Rule against remoteness of vesting
6.1.1 only for trusts which create contingent interests
6.1.1.1 beneficiary not yet born
6.1.1.2 size of interest not yet determined
6.1.1.3 condition attached & not yet satisfied
6.1.2 void unless interest vests within perpetuity period
6.1.3 Perpetuity periods
6.1.3.1 Trusts created prior to 6 April 2010
6.1.3.1.1 80 years if specified
6.1.3.1.2 OR a life in being plus 21 years
6.1.3.2 Trusts created after PAA 2009
6.1.3.2.1 125 years
6.1.3.2.2 can apply 'wait and see'
6.2 Rule against inalienability
6.3 Rule against excessive accumulation of income
7 Formalities
7.1 Lifetime trust
7.1.1 Personalty
7.1.1.1 No formalities
7.1.1.2 If declares self as trustee, is disposing of subsisting equitable interest
7.1.1.2.1 Sec 53(1)(c) LPA 1925
7.1.1.2.1.1 must be in writing
7.1.2 Land
7.1.2.1 Sec 53(1)(b) LPA 1925
7.1.2.1.1 Must be evidence in writing
7.1.2.1.2 AND signed by the settlor or agent
7.1.2.1.3 not enforced if would permit fraud i.e. trustee tries to keep property
7.1.2.1.3.1 Rochefoucauld v Boustead [1897] 1 Ch 196
7.1.3 Settor's equitable interest
7.1.3.1 sub-trust created
7.1.3.1.1 original beneficiary still has active duties
7.1.3.2 original beneficiary drops out
7.1.3.2.1 no active duties to perform
7.1.3.2.2 Sec 53(1)(c) LPA 1925
7.1.3.2.3 drop out idea has been questioned
7.1.3.2.3.1 Nelson v Greening & Sykes Ltd [2007] EWCA Civ 1358; [2008] EGLR 59
7.1.3.3 Sec 53(1)(b) LPA 1925
7.2 Will
7.2.1 Will must be in writing
7.2.2 AND signed by the testator
7.2.3 AND signed by two witnesses
8 Constitution
8.1 Settlor declares self trustee
8.1.1 Trust is automatically constituted
8.2 Lifetime trust by transfer
8.2.1 Legal estate in land
8.2.1.1 transferred by deed
8.2.1.2 see Mascall v Mascall
8.2.2 Chattels
8.2.2.1 delivery or deed of transfer
8.2.3 Company shares
8.2.3.1 delivery of signed stock transfer form and share certificate to trustee
8.2.3.2 see Re Rose
8.2.4 Equitable interest under trust
8.2.4.1 signed written disposition
8.2.5 Expected inheritance
8.2.5.1 incapable of trust
8.3 Will trust
8.3.1 Property vests in PRs
8.3.2 Invariably constituted
8.4 Equity will not assist a volunteer (by interpreting a failed gift as a trust)
8.4.1 Beneficiaries have given consideration
8.4.2 Every effort test
8.4.2.1 Re Rose
8.4.3 Would be unconscionable to revoke
8.4.3.1 T Choithram International SA v Pagarani [2001] 2 All ER 492
8.4.3.1.1 Oral declaration that transferring all his wealth to trust foundation
8.4.3.1.2 Did not hand over stock transfer forms
8.4.3.1.3 Trust held to be valid as he was one of foundation trustees
8.4.3.1.4 Question over whether was intended to be gift or trust
8.4.4 Rule in Strong v Bird