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FOR THE LOVE OF CHRIST benefit of another (called ) JESUS THE BEGINNING AND or some object permitted by . THE END A trust involves the notion of holding EQUITY PART II/LAW OF any property on behalf of someone TRUSTS. else. Even in Yearworth and Others DEFINITION OF TRUST. V North Bristol NHS Trust, the court held that sperm samples can be held in TRUST DISTINGUISHED FROM trust. Most members of the public have OTHER LEGAL CONCEPTIONS. little knowledge of what a trust is and CLASSIFICATION OF TRUST unknown to them, they may be EXPRESS PRIVATE TRUST beneficiaries or even as well- Richard and Ademola complete equity ESSENTIALS OF A TRUST… THE and trust text, cases and materials. THREE CERTAINTIES. TRUST DISTINGUISHED FROM COMPLETELY AND OTHER LEGAL CONCEPTIONS. INCOMPLETELY CONSTITUTED TRUST Trust and Bailment: bailment occurs where the owner of a chattel keeps it in TRUST OF IMPERFECT OBLIGATION. the temporary possession of another. RESULTING AND Similarities: CONSTRUCTIVE TRUSTS. - Both control property which is CHARITABLE TRUSTS. not beneficially their own. - A bailee just like a beneficiary TRUSTEES. APPOINTMENT, can trace the bailed property or its QUALIFICATION, DUTIES, proceeds. POWERS, DETERMINATION, REMEDIES FOR BREACH OF - Both are required to take good TRUST, ETC. care of the property. THE EQUITABLE REMEDY OF Differences: TRACING. - Bailment is a PERPETUITIES AND concept while trust is equitable. ACCUMULATION. - Only chattels can be bailed while any property can be held on trust.

- A is generally the legal LAW OF TRUSTS. owner and can pass a valid title to a As implied from Keeton’s definition: bona fide purchaser for value without Where a person (trustee) holds notice while a bailee has mere special (whether by legal or equitable title) property, possession and cannot pass a property (real or personal) for the valid title. DOWNLOADED FROM ISOCHUKWU.WORDPRESS.COM

- The obligations under a trust are except ostensible, apparent and ratified more onerous that that under bailment. agency.

Trust and Agency: An agent is a Trust and . person that acts on behalf of another person called his principal. Although both create binding obligations: Similarities: - A contract is a common law - The principle of non-delegation obligation while a trust is an equitable (delegatus non potest delegare) obligation. generally applies to both except - A contract arises from circumstances or the agreement between the parties while a dictate otherwise. trust may arise without agreement - Both owe duties and between the parties. E.g. where the are accountable. declares himself as the trustee Differences: of his property or ? - Agency is a common law - Valuable consideration has a concept while trust is an equitable wider meaning in trust than in contract concept. and includes not only money but also - Agency relationships can be other considerations like marriage. created without vesting of any property - The doctrine of privity operates in the agent while trust property must in contract and only parties to the be vested in the trustee to be contract can generally sue on it. Under completely constituted. trust, a beneficiary who is not a party to - At common law, agency the creation of the settlement can sue relationship can terminate upon death on it. however, death of a testator or trustee does not determine the trust. Trust and Administration of Estate. Unlike an agent who can make - Generally, the provisions of the his principal liable to debtors, the Trustees Act 1893 and Trustee Law trustee cannot involve the beneficiary applies to both. However: in liability. - A beneficiary can trace mixed - The major function of the funds while a principal’s remedy in the is to distribute event of mixed funds would be to estate while that of the trustees is to personally sue the agent-Lister V hold it. Stubbs. - Trustee must always act jointly - Trust may not come into while one of the PR may validly existence from an agreement between dispose of pure personalty. the parties. Agency generally does - Section 11 of the trustee Act relating to appointment and retirement DOWNLOADED FROM ISOCHUKWU.WORDPRESS.COM of trustees cannot apply to a PR- is meant to give the property to x if he Adeniji V Registrar fails to make an appointment. Western Nigeria. Trust power distinguished from The limitation period for suing a - power: if there is a gift over in default trustee is 6 years while that of a PR is of appointment, then it would be 12 in respect of claims relating to the construed to be a trust power- personal estate of the deceased person Burrough V Philcox. Section 31 Limitation Decree. Where there is however, there is no and power: limitation. discretionary trust occurs where a - Unlike trustees, PRs hold both trustee holds property on trust for a legal and equitable interest in the group of beneficiaries and is to pay to deceased’s estate so that they can easily such of the beneficiaries as he deems sell and administer it. fit. No beneficiary entitled as of right they only have a spes (hope) that the Note however that a person can be both exercise of the discretion is in their PR and Trustee where a will establishes favour. However they can sue where a trust and appoints the same persons to such appointment is not done in good be both executors and trustees. faith… but cannot claim entitlement to be appointed. Megarry VC in Re Trust and Powers. Hay’s Settlement Trust noted that As Megarry VC noted in Re Hay’s unlike mere power, the trustees here are Settlement, trust power is mandatory under a positive duty to consider the and the court would see to its execution exercise of their discretion while a done while mere power is discretionary. of power may decide not to do so. In Re Smith, all the beneficiaries combined : occurs where together to claim the trust property and the donor empowers the donee to end the trust. appoint property to any person he chooses including himself (general Trust of imperfect obligation and power) or any person he chooses within power resemble in that they cannot be a specified class only (special power). compelled to act since there are no Appointment must be in accordance human beneficiaries. with the trust. In Turner V Turner, the Trust for sale distinguished from power trustee was given a power to appoint of sale and power to postpone sale. two members of the Turner family but he made three appointments. The court Trust for sale binds trustees to sell and held that the appointments were void as hold the proceeds in trust for the they were contrary to the intention of beneficiaries. Conversion operates the trust. There is always a gift in under trust for sale as equity regards the default of appointment where the donee land as converted to money even DOWNLOADED FROM ISOCHUKWU.WORDPRESS.COM though not actually sold. Under power used to circumvent tax liability. He of sale, the trustees cannot be only looks after the property. compelled to exercise power of sale- Re Hilton. Who can be a trustee?: Anyone qualified to take legal CLASSIFICATION. - interest in property. 1. 1. Express, implied/resulting - A public trustee (created under and constructive trust. statute). 2. 2. Private and public trust: the - Trust Corporation: like UBA. former is for the benefit of an Capacity: same as general law of individual or class of beneficiaries contract. If you can hold land, you can while the latter is for the benefit of the declare trust over land. Re Adams public as a whole. Kensington Vestry. 3. 3. Trust of Perfect and imperfect obligation: The former has human . beneficiaries while the latter is not EXPRESS PRIVATE TRUST enforceable by human beneficiaries. 4. 4. Executed and executory trust: Are trusts that are intentionally created the former entails where the precise by the owner of the property through beneficial interest of each beneficiary the following ways: has been clearly specified by the - - Where the declares inter testator. While the latter merely vivos that he holds the property on trust indicates a scheme of settlement and for certain beneficiaries or leaves the details to be filled in by the - - The settlor conveys property to trustees. trustees to hold in trust. Where it is a 5. 5. Completely and incompletely trust of land, it must be evidenced in constituted: the former occurs where writing in accordance signed by the necessary steps have been taken to vest party declaring with Section 7 and 9 of the trust property in the trustees for the the Statue of , Section 78 benefit of the beneficiaries. All trusts PCL. Where pure personalty, oral arising under wills are regarded as declaration would suffice. In Grey V completely constituted. IRC, the court held that disposition of 6. 6. Blind trust: where a number equitable interest should be in writing. of donor pay into a trust fund for a The Lagos state law provides that beneficiary or beneficiaries who do not writing or oral conveyance may suffice. know them. E.g. when people donate - Where the settlor disposes the for politicians to run campaigns. property to trustee by will. (the trust 7. 7. : the trustee just arises after the death of the testator). holds property for beneficiaries Such must comply without any other obligation. This is with the provisions of Section 9 of the DOWNLOADED FROM ISOCHUKWU.WORDPRESS.COM

Wills Act 1837 which requires that it be precisely identified/described so be signed be the testator and the must the separate beneficial interest to signature witnessed by two or more be taken by each beneficiary. “Such people at the foot thereof. Disposition parts of my estate”-Re Jones “the made after the signature is invalid. A residuary bulk of my ”- can be used to amend the Palmer V Simmonds were held not to provisions of a will. It has been noted create a trust. Boyce V Boyce. (The that Subsequent marriage revokes Maria and Charlotte case). Although previous will-Section 18 Wills Act. the courts may in certain instances Note however, that equity would not apply the maxim; equality is equity. follow the law where it would produce Where there is no certainty of subject unjust consequences. matter, then there can be no trust of any property. THE THREE CERTAINTIES. 3. Certainty of Objects: the This was laid down by Lord Eldon in identity of the beneficiaries must be Wright V Atkyns: “the words must be indicated with certainty for the trustees imperative, subject matter must be to know whom they hold property for, certain and the object must be as certain else the trust would fail or result unless as the subject matter”. This was also it is charitable. Re Astor’s Trust for noted by the court in Knight V Knight. the “maintenance of good understanding between nations” and 1. Certainty of words/intention: “preservation of integrity of although certain technical words are newspapers” failed. For “near not required, the testator’s intention relations” failed in Sale V Moore. must be clearly manifest by his use of However, in Re Coates, “to such words. Although early courts of equity friends as are nominated by my wife” pardoned use of precatory words (I was held as valid also in Re Beatty “to wish, I desire, and so on) where the such persons… as they deed fit” was intention of the testator was still held to be valid. In respect of power of manifest, it has been disallowed in appointment among class, (trust recent times. Court held not trust in Re powers) McPhail V Doulton specifies Adams and Kensington Vestry where that such trust is valid if “it can be said the testator gave to his wife “in full with certainty that an individual is or is confidence that she would do what is not a member of the class”. Uncertainty right as to the disposal thereof between of objects usually creates a resulting my children”. Held that the wife took trust. Any missing beneficiary may be beneficially. Where there is no presumed dead after 7 years. The certainty of words, the donee takes trustee may then apply for a (Re beneficially. Benjamin) Benjamin order to 2. Certainty of Subject matter: the distribute the property among the property to be bound by the trust must DOWNLOADED FROM ISOCHUKWU.WORDPRESS.COM available beneficiaries. A cypress may be done by conveyance to trustees doctrine may be utilized to apply the or by declaration of trust. The trust to a similar purpose intended by appropriate methods of transfer must the beneficiary. Therefore, all trusts be used. excluding charitable trusts must have A covenant with trustees to settle known beneficiaries. property in the future or a defective COMPLETELY AND conveyance to trustees are examples of INCOMPLETELY CONSTITUTED incompletely constituted trusts. TRUST A declaration of trust: by the settlor When the property has become vested when he declares that he holds certain in the trustees for the benefit of the property on trust for beneficiaries. beneficiaries, it is completely Exceptional Cases where a trust would constituted. The effect being that the be held to be completely constituted. beneficiaries can now sue to enforce. Where incompletely constituted, only a 1. Wills. beneficiary that has given value can sue 2. Secret Trusts: Dehors the will (for specific performance) as equity (operates outside the will) As was would not aid a volunteer (someone noted in Bannister V Bannister, the that has not given valuable donor transfers property to a person consideration)-Jefferys V Jefferys. who has (prior to the creation of the Husband, wife and legitimate issues of trust) agreed to hold it in trust for a the marriage are not regarded as beneficiary who is not stated in the volunteers. The settlor must do all that will-Re Boyes. Here the testator wishes is necessary to set a perfect trust to conceal the identity of the beneficiary e.g. where the beneficiary Modes of constituting a trust. is an illegitimate child or mistress-Re Conveyance to trustees: the donor’s Boyes. It may be: interest must have been totally vested - Fully secret trust: property is in the trustees. The rule was qualified given to the without reference in Milroy V Lord, to the effect that to any trust. Where the legatee was provided the settlor/donor has done unaware of the trust intended by the everything required of him to execute testator until after his death, he takes the transfer and render the settlement beneficially. binding, equity regards it as complete. - Half-Secret Trusts: here the will In Re Rose, the rule in Milroy V Lords states that the legatee is to hold on trust was qualified to everything within his but does not express the objects of the power. Thus, until the donee’s legal trust e.g. “for the purposes which I have title is complete, the donor holds the communicated to him”. In this case, the property as trustee for the donee. This legatee cannot take beneficially- DOWNLOADED FROM ISOCHUKWU.WORDPRESS.COM

Blackwell V Blackwell where the  If the testator subsequently testator had given for “the purpose varies the legacy by a codicil but fails discussed” and the legatee had agreed. to communicate such to the legatee, the In this case, the court also noted that the secret beneficiary is entitled to the provisions of the wills act do not apply original amount only. to secret trust.

The court in Blackwell V Blackwell noted the conditions: 3. Donationes Mortis Causa:  The purpose must have been described in Re Beaumont an act giving communicated by the testator to the the donee absolute title of a gift legatee. In Re Keen, the court held that provided the donor dies. communication to one of the trustee The gift must have been made would suffice. in contemplation of death in  The testator must have intended the near future. a secret trust. Notwithstanding  The Legatee must have acquiesced… ie accepted to carry out the trust.

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