Equity and trust

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If Kerry intended to create a trust it would constitute as an express trust as it is a trust which has been expressly and intentionally declared by its creator (the testator). There are a number of requirements for the creation of a valid express trust. Trusts declared by will must follow the formalities laid down in S9 Wills Act 1837. A will is only valid if in writing, signed by the testator in the presence of two witnesses, who themselves attest and sign the will in the presence of the testator.

An express trust must have certainty. This requirement of certainty has long been regarded as falling into three parts. However it should be stressed, that all these matters are ultimately a matter of construction. Firstly the settler must make it clear that his intended trustees are under an obligation to carry out his wishes. Lord Romilly expressed the maxim ‘equity looks to the substance rather than the form’, the court looks not at the words of the settlor but rather the result he was trying to achieve. It is therefore evident that no particular form of words are required, ‘it is well settled that a trust can be created without using the word “trust” or “confidence” or the like; the question is whether in substance a sufficient intention to create a trust has been manifested’.  The fact that Kerry has not used the word ‘trust’ does not then mean there is no trust. Furthermore it becomes clear that ‘the words must be imperative’. This is evident in the case of Paul-v- Constance [1977] 1 ALL ER 195, where the phrase ‘the money is as much yours as it is mine’ was accepted by the court as sufficient evidence that he regarded himself as holding the account as trustee for himself and his wife.  Additionally a further difficulty arises where the settler uses precatory words, which are expressions of hope and desire that the donee will use the property in a certain way. The courts have adopted a strict approach since Lambe-v- Eames where the phrase ‘in any way she may think best, for the benefit of herself and the family’ was held to be ineffective and the widow took absolutely. It could now be argued that the hope that Kerry expressed,  that Phillip will give a fair share to Yasmin can be seen to be ineffective as it is only her desire that will happen, resulting in Philip taking the full amount. Moreover it can be seen as ‘the fair share to Yasmin’ can be said to be a gift and ‘equity will not perfect an imperfect gift’. Therefore if it is seen as a gift equity will not allow it to be valid.

Secondly the settlor must make clear what property is to be subject to the trust. Once again the words must have a clear meaning that the trustees, and if necessary the court can interpret. Therefore the phrase such as ‘the bulk of my estate’  will not identify the subject matter clearly since it may mean different things to different people. Uncertainty can take two forms:

  • Property itself can be uncertain which constitutes no trust at all.
  • Beneficial entitlement can be uncertain where then the trustees hold on resulting trust for the settlor.

When looking at the situations at hand, the £50,000 to Phillip and Uxbridge Athletics club is certain however on the other hand the collection of impressionist paintings can form some problems as it is difficult to establish what is impressionist paintings, it is very ambiguous, for example can a drawing by her niece which she attempted to copy from be seen as an impressionist painting? Moreover the property itself is uncertain therefore it can be debated that this constitutes no trust. On the other hand however the phrase ‘a reasonable income’ in the case of Re Golay [1965] 2 All ER 660 was held not to be uncertain as the court said they can make an assessment of what a reasonable income is. Maybe then it could be argued that the court may be able to establish what the term ‘impressionist paintings’ may mean.

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The final element of the requirement of certainty is that the settlor shall have identified the persons who are to benefit under the trust. There must be someone in whose behalf the court can decree performance; furthermore the trustee needs to know in whose favour he is exercising his powers and duties. When looking at fixed trusts to carry out this obligation trustees must clearly state names so no problem poses, there must be class ascertainably. Therefore both Philip, Yasmin and the Uxbridge athletics club can be seen to be identifiable objects ,no problems arise in relation to that. On the ...

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