Topic 8- Secret Trusts
Lecture 1- Introduction to Secret Trusts
Bequeath- leave property by will
Bequest- property that has been left by will
Legacy- also property that is left by will
Legatee- the person who gets that property
Residual estate- testators estate that hasn’t been giving away before their death
Residual legatee- the person who claims that estate
Devise- a legacy of land
Devisee- person who under the will receives the devise
Inter vivos disposition- takes effect during the lifetime of the donor/settlor (gift or a trust)
Testamentary disposition- takes effect when the testator dies
Formality Requirements of the Wills Act 1837 and Secret Trusts
• s9: ‘no will shall be valid unless’ certain formality requirements are complied with-
the will must be:
• in writing;
• signed by the testator;
• in presence of two or more attesting witnesses present at the same time.
• s1: the word ‘will’ shall extend to a testament, and to a codicil… and to any other
testamentary disposition’
• Secret trusts are trusts that take effect upon death which appear not to comply with
s9
Fully and Half Secret Trusts
Fully Secret- arises when the testator leaves a legacy which is absolute on the face of the
will but subject to an understanding that the legatee will hold the legacy on trust for a
secret beneficiary eg: “£40,000 to my friend Cecilia” and Cecelia has agreed to hold it for the
benefit of Lucas
Half Secret- arises when the will indicates that the legacy is to be held on trust but does not
reveal the identity of the beneficiaries or the terms of the trust, and the legacy is subject to
an understanding that the legatee will hold the legacy on trust for a secret beneficiary eg:
“£40,000 to my friend Ahmed to hold on those trusts that I have declared to him” does not
specify who
, Why do secret trusts occur?
The testator wants to provide for a mistress and/or an illegitimate family
Blackwell v Blackwell (1929)- secret trust for his mistress
The testator was persuaded by a deceitful secret trustee to create the secret trust
rather than amend his will
Oldham v Litchford (1705)- testator trusted his brother to play the plaintiff after his
death and then refused to pay the legacy (held: he had to pay it)
Attempts to avoid taxation
Kasperbaeur v Griffith (2000)
The testator wished to amend his will without executing a codicil (valid amendment
to a will- complies with s.9)
Reech v Kennegal (1748)
Indecision by the testator when executing his will
Re Snowden (1979)- couldn’t decide who to leave the property to and was going to
tell her brother at some point who she wanted the trust to be held for
As a result of a poorly drafted will
Re Williams (1933)
To keep a secret
Re Freud (2014)
Why do secret trusts appear to contravene s.9?
• The basic rule in s9 is that any attempt to determine the destination of one's
property (including by trust) which is to take effect after one's death that does not
appear in a valid will is void
• Secret trusts appear to be enforced in contravention of this statutory provision
• Judges are constitutionally bound by the doctrine of parliamentary sovereignty to
adhere to statutory provisions
• Therefore, the doctrine of secret trusts ‘has for over 200 years been the subject of
vexed controversy’ (per Lord Buckmaster in Blackwell at 318)
Lecture 2- Requirements for Valid Secret Trusts (1)
Ottaway v Norman (1972)- there must be
1. Intention of the testator to subject the legatee to a trust obligation in favour of the
secret beneficiary
2. Communication of the intention to the secret trustee
3. Acceptance of the obligation by the secret trustee
Lecture 1- Introduction to Secret Trusts
Bequeath- leave property by will
Bequest- property that has been left by will
Legacy- also property that is left by will
Legatee- the person who gets that property
Residual estate- testators estate that hasn’t been giving away before their death
Residual legatee- the person who claims that estate
Devise- a legacy of land
Devisee- person who under the will receives the devise
Inter vivos disposition- takes effect during the lifetime of the donor/settlor (gift or a trust)
Testamentary disposition- takes effect when the testator dies
Formality Requirements of the Wills Act 1837 and Secret Trusts
• s9: ‘no will shall be valid unless’ certain formality requirements are complied with-
the will must be:
• in writing;
• signed by the testator;
• in presence of two or more attesting witnesses present at the same time.
• s1: the word ‘will’ shall extend to a testament, and to a codicil… and to any other
testamentary disposition’
• Secret trusts are trusts that take effect upon death which appear not to comply with
s9
Fully and Half Secret Trusts
Fully Secret- arises when the testator leaves a legacy which is absolute on the face of the
will but subject to an understanding that the legatee will hold the legacy on trust for a
secret beneficiary eg: “£40,000 to my friend Cecilia” and Cecelia has agreed to hold it for the
benefit of Lucas
Half Secret- arises when the will indicates that the legacy is to be held on trust but does not
reveal the identity of the beneficiaries or the terms of the trust, and the legacy is subject to
an understanding that the legatee will hold the legacy on trust for a secret beneficiary eg:
“£40,000 to my friend Ahmed to hold on those trusts that I have declared to him” does not
specify who
, Why do secret trusts occur?
The testator wants to provide for a mistress and/or an illegitimate family
Blackwell v Blackwell (1929)- secret trust for his mistress
The testator was persuaded by a deceitful secret trustee to create the secret trust
rather than amend his will
Oldham v Litchford (1705)- testator trusted his brother to play the plaintiff after his
death and then refused to pay the legacy (held: he had to pay it)
Attempts to avoid taxation
Kasperbaeur v Griffith (2000)
The testator wished to amend his will without executing a codicil (valid amendment
to a will- complies with s.9)
Reech v Kennegal (1748)
Indecision by the testator when executing his will
Re Snowden (1979)- couldn’t decide who to leave the property to and was going to
tell her brother at some point who she wanted the trust to be held for
As a result of a poorly drafted will
Re Williams (1933)
To keep a secret
Re Freud (2014)
Why do secret trusts appear to contravene s.9?
• The basic rule in s9 is that any attempt to determine the destination of one's
property (including by trust) which is to take effect after one's death that does not
appear in a valid will is void
• Secret trusts appear to be enforced in contravention of this statutory provision
• Judges are constitutionally bound by the doctrine of parliamentary sovereignty to
adhere to statutory provisions
• Therefore, the doctrine of secret trusts ‘has for over 200 years been the subject of
vexed controversy’ (per Lord Buckmaster in Blackwell at 318)
Lecture 2- Requirements for Valid Secret Trusts (1)
Ottaway v Norman (1972)- there must be
1. Intention of the testator to subject the legatee to a trust obligation in favour of the
secret beneficiary
2. Communication of the intention to the secret trustee
3. Acceptance of the obligation by the secret trustee
