General Tips
- Wording of the q is crucial
o Will determine whether to just consider declaration of trust or
also consider constitution
- Just go through the rule that applies do not need to go through
each one and discount rules unless it is relevant
- Explain the residual effects of if the trust is not successful (i.e. pass
to testator/testatrix’s residual estate and the intestacy rules)
- Watch out for ‘maintenance’ points to issues with perpetuity
- Watch out for whether the settlor themselves are trustees
unconscionability no transfer of legal title needed (Choithram
International SA v Pagarani)
- Whether they are both executor and trustee Strong v Bird
Exam structure
- No bullet points more critical analysis
- Focus on discussing the issues rather than the ‘non-issues’
Equitable maxims:
- ‘Equity will not suffer a wrong to be without a remedy’
- ‘Whoever comes to equity must come with clean hands’
o A remedy in equity will not be available to the claimant who
has not behaved in good conscience (legally rather than
morally) themselves in the matter in dispute (Argyll (Duchess)
v Argyll (Duke))
- ‘Equity will not assist a volunteer’/’Equity will not perfect an
imperfect gift’
o Volunteer – somebody who has not provided consideration for
a particular transaction
- ‘Delay defeats equity’
o Undue delay in bringing a claim will cause a claimant to lose
their legal rights
- ‘Equity is equality’
o Parties are treated on an equal basis
- ‘Equity looks to intent rather than form’
o Substance of the transaction rather than the form it takes
Types of Trusts:
Splits ownership of the ‘asset’ into legal ownership and equitable
ownership
- Include direct quotation from advanced material which indicate
which trust it is
,Express Trusts
- Need to be evidenced in writing and signed in order to be
enforceable (s 53(1)(b) LPA 1925)
Individual
Fixed
- No element of discretion is available to the trustees
- The terms of the trust define the share of the trust property which
the beneficiary will receive
Determined by these interests:
- Vested (no conditions)/Contingent (conditions)
- Successive
o In possession (now)/In remainder (later)
o Limited (income only)/Absolute (capital & income)
- Bare
o The trustees hold on trust for a sole adult beneficiary
possessing full mental capacity absolutely (with no limitations
or conditions attached)
o The beneficiary(s) can end the trust at any time, by
demanding that the trustees transfer legal title to them so
that they become the outright owner (Saunders v Vautier):
Are in existence and ascertained;
Are 18 or older and of sound mind (sui juris); and
Agree to the proposed course of action [ALL OF THE
BENEFICIARIES]
o This is because beneficiaries are felt to have certain rights to
their own financial independence and autonomy as young
adults (Wright v Gater)
o Arguable that objects under a discretionary trust could bring
the trust to an end under Saunders v Vautier (Re Smith)
between them they could own the whole equitable interest
however this argument has not been developed or confirmed
any further in cases since 1928
Discretionary
- Gives the trustees a discretion as to the amount any beneficiary
may receive and/or whether particular beneficiaries receive
anything at all
- ‘where someone is under a duty to select from among a class of
beneficiaries those who are to receive, and the proportions in which
they are to receive, income or capital of the trust property’ (Warner
J in Mettoy Pension Trustees Ltd v Evans)
- No individual has an equitable interest until the trustees exercise
their discretion in that individual’s favour (called ‘objects’ rather
than beneficiaries)
, - Arguable that objects under a discretionary trust could bring the
trust to an end under Saunders v Vautier (Re Smith) Arguable that
objects under a discretionary trust could bring the trust to an end
under Saunders v Vautier (Re Smith) between them they could
own the whole equitable interest however this argument has not
been developed or confirmed any further in cases since 1928
- Limitations:
o Administrative unworkability
When the class of potential beneficiaries is so wide that
it does not form ‘anything like a class’ (Lord Wilberforce
in McPhail v Doulton; R v District Auditor, ex p West
Yorkshire Metropolitan CC)
o Capriciousness (‘irrational’) (Templeman J in Re Manisty’s
Settlement) (Brown v Burdett)
The terms negative any sensible intention on the part of
the settlor
The terms require the trustees to consider only an
accidental conglomeration of persons who have no
discernible link with the settlor or any institution
Purpose Trusts
Charitable Trusts
- Is the trust charitable?
o Purpose under s 3(1) Charities Act 2011
(a) The prevention or relief of poverty
In Re Coulthurst, the Commission refers to poverty as
‘financial hardship’ (which does not necessarily mean
poor) or ‘lack of material things’
(b)Th advancement of education
According to the Commission guidance, education is to
‘promote, sustain and increase individual and collective
knowledge and understanding’ wide ranging
Research could also be included BUT must add
educational value rather than merely be research for
research’s sake (Re Shaw’s Will Trust)
(c) The advancement of religion
Relates to the promotion of a system of beliefs which
may or may not involve the worship of god or gods (s
3(2)(a) Charities Act 2011)
However the definition does not extend to the Church of
Scientology
Could manifest itself in provisions of spaces of worship,
outreach work, devotional activities and educational
programmes about the belief system HOWEVER what
is needed are activities which made a connection with
the public, however minimal (Gilmour v Coates)
(d)The advancement of health or the saving of lives
, Covers prevention against and relief from illness as well
as the promotion of health
The Commission indicates that the benefits of any
alternative therapy must be sufficiently evidenced
(e) The advancement of citizenship or community
development
This would cover organisations such as the Scouts or the
Guides, promoting civic responsibility, or promoting
volunteering and the voluntary sector
(f) The advancement of the arts, culture, heritage or science
Covers the promotion of art at a national, local,
professional or amateur level across different media and
materials
The art does have to satisfy an analysis of its merit (Re
Pinion (Dec’d))
Heritage relations to national or local history, cultural
traditions, preservation of historic land and buildings
(g)The advancement of amateur sport
The promotion of health by the undertaking of physical
or mental skill and exertion at an amateur, community
level
(h)The advancement of human rights, conflict resolution or
reconciliation or the promotion of religious or racial
harmony or equality and diversity
When considering human rights, the Commission
accepts that raising awareness of human rights at home
and abroad, monitoring of human rights abuses,
obtaining redress for and relieving the needs of victims
are all relevant activities
Conflict resolution involves identification of causes of
conflict as well as resolution by mediation or other
means
(i) The advancement of environmental protection or
improvement
It must be shown to be worthy of conservation
(j) The relief of those in need by reason of youth, age, ill-
health, disability, financial hardship or other disadvantage
Can cover providing relief – advice, equipment,
accommodation, care – to anyone in need as a result of
any of the stated issues
(k) The advancement of animal welfare
Concerned with the prevention or elimination of cruelty
to animals and the general prevention and relief of
animal suffering
(l) The promotion of the efficiency of the armed forces of the
Crown, or of the efficiency of the police, fire and rescue
services or ambulance services
- Wording of the q is crucial
o Will determine whether to just consider declaration of trust or
also consider constitution
- Just go through the rule that applies do not need to go through
each one and discount rules unless it is relevant
- Explain the residual effects of if the trust is not successful (i.e. pass
to testator/testatrix’s residual estate and the intestacy rules)
- Watch out for ‘maintenance’ points to issues with perpetuity
- Watch out for whether the settlor themselves are trustees
unconscionability no transfer of legal title needed (Choithram
International SA v Pagarani)
- Whether they are both executor and trustee Strong v Bird
Exam structure
- No bullet points more critical analysis
- Focus on discussing the issues rather than the ‘non-issues’
Equitable maxims:
- ‘Equity will not suffer a wrong to be without a remedy’
- ‘Whoever comes to equity must come with clean hands’
o A remedy in equity will not be available to the claimant who
has not behaved in good conscience (legally rather than
morally) themselves in the matter in dispute (Argyll (Duchess)
v Argyll (Duke))
- ‘Equity will not assist a volunteer’/’Equity will not perfect an
imperfect gift’
o Volunteer – somebody who has not provided consideration for
a particular transaction
- ‘Delay defeats equity’
o Undue delay in bringing a claim will cause a claimant to lose
their legal rights
- ‘Equity is equality’
o Parties are treated on an equal basis
- ‘Equity looks to intent rather than form’
o Substance of the transaction rather than the form it takes
Types of Trusts:
Splits ownership of the ‘asset’ into legal ownership and equitable
ownership
- Include direct quotation from advanced material which indicate
which trust it is
,Express Trusts
- Need to be evidenced in writing and signed in order to be
enforceable (s 53(1)(b) LPA 1925)
Individual
Fixed
- No element of discretion is available to the trustees
- The terms of the trust define the share of the trust property which
the beneficiary will receive
Determined by these interests:
- Vested (no conditions)/Contingent (conditions)
- Successive
o In possession (now)/In remainder (later)
o Limited (income only)/Absolute (capital & income)
- Bare
o The trustees hold on trust for a sole adult beneficiary
possessing full mental capacity absolutely (with no limitations
or conditions attached)
o The beneficiary(s) can end the trust at any time, by
demanding that the trustees transfer legal title to them so
that they become the outright owner (Saunders v Vautier):
Are in existence and ascertained;
Are 18 or older and of sound mind (sui juris); and
Agree to the proposed course of action [ALL OF THE
BENEFICIARIES]
o This is because beneficiaries are felt to have certain rights to
their own financial independence and autonomy as young
adults (Wright v Gater)
o Arguable that objects under a discretionary trust could bring
the trust to an end under Saunders v Vautier (Re Smith)
between them they could own the whole equitable interest
however this argument has not been developed or confirmed
any further in cases since 1928
Discretionary
- Gives the trustees a discretion as to the amount any beneficiary
may receive and/or whether particular beneficiaries receive
anything at all
- ‘where someone is under a duty to select from among a class of
beneficiaries those who are to receive, and the proportions in which
they are to receive, income or capital of the trust property’ (Warner
J in Mettoy Pension Trustees Ltd v Evans)
- No individual has an equitable interest until the trustees exercise
their discretion in that individual’s favour (called ‘objects’ rather
than beneficiaries)
, - Arguable that objects under a discretionary trust could bring the
trust to an end under Saunders v Vautier (Re Smith) Arguable that
objects under a discretionary trust could bring the trust to an end
under Saunders v Vautier (Re Smith) between them they could
own the whole equitable interest however this argument has not
been developed or confirmed any further in cases since 1928
- Limitations:
o Administrative unworkability
When the class of potential beneficiaries is so wide that
it does not form ‘anything like a class’ (Lord Wilberforce
in McPhail v Doulton; R v District Auditor, ex p West
Yorkshire Metropolitan CC)
o Capriciousness (‘irrational’) (Templeman J in Re Manisty’s
Settlement) (Brown v Burdett)
The terms negative any sensible intention on the part of
the settlor
The terms require the trustees to consider only an
accidental conglomeration of persons who have no
discernible link with the settlor or any institution
Purpose Trusts
Charitable Trusts
- Is the trust charitable?
o Purpose under s 3(1) Charities Act 2011
(a) The prevention or relief of poverty
In Re Coulthurst, the Commission refers to poverty as
‘financial hardship’ (which does not necessarily mean
poor) or ‘lack of material things’
(b)Th advancement of education
According to the Commission guidance, education is to
‘promote, sustain and increase individual and collective
knowledge and understanding’ wide ranging
Research could also be included BUT must add
educational value rather than merely be research for
research’s sake (Re Shaw’s Will Trust)
(c) The advancement of religion
Relates to the promotion of a system of beliefs which
may or may not involve the worship of god or gods (s
3(2)(a) Charities Act 2011)
However the definition does not extend to the Church of
Scientology
Could manifest itself in provisions of spaces of worship,
outreach work, devotional activities and educational
programmes about the belief system HOWEVER what
is needed are activities which made a connection with
the public, however minimal (Gilmour v Coates)
(d)The advancement of health or the saving of lives
, Covers prevention against and relief from illness as well
as the promotion of health
The Commission indicates that the benefits of any
alternative therapy must be sufficiently evidenced
(e) The advancement of citizenship or community
development
This would cover organisations such as the Scouts or the
Guides, promoting civic responsibility, or promoting
volunteering and the voluntary sector
(f) The advancement of the arts, culture, heritage or science
Covers the promotion of art at a national, local,
professional or amateur level across different media and
materials
The art does have to satisfy an analysis of its merit (Re
Pinion (Dec’d))
Heritage relations to national or local history, cultural
traditions, preservation of historic land and buildings
(g)The advancement of amateur sport
The promotion of health by the undertaking of physical
or mental skill and exertion at an amateur, community
level
(h)The advancement of human rights, conflict resolution or
reconciliation or the promotion of religious or racial
harmony or equality and diversity
When considering human rights, the Commission
accepts that raising awareness of human rights at home
and abroad, monitoring of human rights abuses,
obtaining redress for and relieving the needs of victims
are all relevant activities
Conflict resolution involves identification of causes of
conflict as well as resolution by mediation or other
means
(i) The advancement of environmental protection or
improvement
It must be shown to be worthy of conservation
(j) The relief of those in need by reason of youth, age, ill-
health, disability, financial hardship or other disadvantage
Can cover providing relief – advice, equipment,
accommodation, care – to anyone in need as a result of
any of the stated issues
(k) The advancement of animal welfare
Concerned with the prevention or elimination of cruelty
to animals and the general prevention and relief of
animal suffering
(l) The promotion of the efficiency of the armed forces of the
Crown, or of the efficiency of the police, fire and rescue
services or ambulance services
