Glossary of Common Terms

Pearce & Stevens' Trusts and Equitable Obligations, 7th edition.

Glossary of common terms

Acquiescence assent to a set of events Bankruptcy a legal process started by or that can be express, or inferred from the against an individual (a ‘bankrupt’) who is conduct of a party. no longer able to meet outstanding debts Ad valorem proportionate to the value of the owed to creditors. property. Bare trust a trust in which the trustees are Administrator a person appointed by the only effectively nominees and must act ac- court to deal with the estate of a deceased cording to the beneficiaries’ instructions. person (a female administrator is known as Beneficiary a person entitled to the benefit an ‘administratrix’); an administrator can or enjoyment of the trust property held by also be appointed to wind up an insolvent the trustees. company. Beneficial interest the nature of the Advancement, power of enables the equitable interest the beneficiary has in a trustees to advance (make an immediate trust. payment of) part of the capital to beneficia- Bequest a gift of personal property made ries who are contingently interested in the under a will. trust fund, but who have not yet satisfied all Bona fide in good faith. the conditions for immediate payment. Bona vacantia property which vests in the After-acquired property property ac- Crown, because no other owner can be quired after a trust or settlement is created. established. To be distinguished from future property. Capacity to be of the age of legal major- Agency an arrangement where one person ity (18) and not to be suffering from a (the agent) acts for another (the principal), disability that prevents the person from and where the acts of the agent can bind understanding the transaction in question. the principal. Capacity is required for making binding Annuity an annual payment made in return legal arrangements such as entering into le- for the payment of a lump sum (unless the gally binding agreements or making a will. contract otherwise specifies, there is no Also known as being ‘sui juris’ (in charge right to the repayment of all or any part of of one’s own affairs). the capital). Capital the property (or fund) held under Assignment where one person transfers the a trust. whole of his/her entitlement to property to Cestui que trust a beneficiary under a another, so that he/she retains no rights in trust. the property whatsoever. Charge a security for the payment of a Attorney, power of a form of agency debt or the fulfilment of an obligation under which one person (the attorney) is that operates over identified property (see empowered to act for another (the princi- mortgage). pal) in executing deeds or (in the case of a lasting power of attorney) making defined Charity an organization or purpose which decisions on behalf of the principal; also is recognized by law as being of such public the instrument conferring this authority. benefit as to merit special treatment.

lxvi Glossary of common terms

Chattel an item of personal property (see yet taken place (e.g., a gift to Clarissa if she personal property). survives her mother who is still alive). Chose in action property (such as copy- Covenant a contractual promise contained right or the right to payment of a debt) in a deed. which has no physical existence but is Debt a sum of money due from one person enforceable through legal proceedings. (the debtor) to another (the creditor). Civil partners partners in a registered Deed a specialized form of document, which same-sex relationship, which gives similar must declare on its face that it is a deed and property entitlements as conferred on mar- must be signed by the parties in the pres- ried couples. ence of a witness. Claimant a person initiating an action in Dehors the will literally, outside the will. court (formerly known as a ‘plaintiff’). Devise a gift of real property made under Cohabitant a person living with another, a will. in a close personal relationship, who is nei- Determinable interest an interest ther a registered civil partner nor a spouse. that ends on the happening of an event, A cohabitant is sometimes referred to as a although the event may never occur (e.g., ‘cohabitee’. a gift of an annual sum to Davina until she Consideration the concept of value given qualifies as a solicitor). in return for a promise or the transfer of Discretionary trust a trust in which the property, which is a prerequisite to trans- trustees elect how to distribute property form a promise into a binding contractual among a class of potential beneficiaries obligation at law. In equity, consideration (the objects of the discretionary trust), as has a slightly wider meaning and can they in their discretion think fit. include the reason why a transfer is made (such as love and affection), even if no Disclaimer a refusal to accept either value is provided. an office (such as the office of trustee) or a gift. Constructive trust a trust that is implied or imposed by operation of law, in Disposition a transfer of title to property. defined circumstances relating to uncon- Distributive power power to allocate scionable conduct by the parties. property either generally or to the mem- Contempt of court conduct which im- bers of a defined class (objects). pedes the court process. In the context of Donee a person who receives either prop- equity, this would usually consist of a fail- erty or a distributive power. ure to follow an order of the court, which Donor a person who gives property by way may lead to a fine or a custodial sentence. of a gift or creates a distributive power in Conveyance the transfer and vesting of favour of the donee. title to, or the creation of an interest in, Election a choice, e.g., to rescind a contract property (usually land). or keep it in existence, or to choose a par- Conditional gift a gift which is depen- ticular remedy. dent on a specified event occurring or Endowment where property is given to thing being done (e.g., a gift to Charlie if provide a permanent fund or source of she graduates with a degree in law). income. Contingent interest a right which is Equitable title title to property that is provisional because it is dependent on only enforceable in equity, and is vested in the happening of an event which has not the beneficiaries under a trust.

Glossary of common terms lxvii

Equitable interest an interest that can Inalienable unable to transfer e.g., only be enforced in equity. inalienable property is property that may Estate either describes the property assets not be transferred. of a deceased person or describes the own- Intangible without physical form, e.g., ership rights a person enjoys over land. intangible property, such as shares in a Executor a person who acts as personal company. representative of a deceased person in Inter alia among other things. carrying out the terms of a will and who Inter vivos during one’s lifetime. was named in the will. (A person acting Intestacy the process relating to the dis- as a personal representative who is not tribution of an individual’s property after named in the will is known as an admin- death where an individual dies without istrator.) leaving a will. Exemption clause a contractual term Insolvency a legal process started by or designed to exclude or reduce the liability against a company that is no longer able to of one or other parties. meet outstanding debts owed to creditors. Express trust a trust that is intentionally Instrument the legal document that cre- created. ates an obligation or transfers an interest Fiduciary a person who has undertaken (e.g., a trust instrument is the document an obligation of loyalty to another and creating a trust). is compelled to put that other person’s Judicial trustee a person appointed by interests before his/her own (e.g., director the court to replace a trustee or fiduciary of a company is a fiduciary for the who has acted improperly (e.g., personal company shareholders). representatives under a will). Fiduciary obligations the duties imposed Knowledge the state of mind or aware- by equity on a fiduciary to make sure that ness of facts necessary to the imposition of they act in the best interests of the person liability. to whom they stand as a fiduciary. Lease an estate in land of limited duration Future property rights to property that (held by a tenant), which is created out of a have not yet been acquired, but may be large estate of another (the landlord). acquired in the future. Lien a right to claim or hold another’s prop- Gift a gratuitous transfer of all title in erty as security for a debt. property. Life interest an interest in property that Gratuitous without receiving a legally lasts for the duration of the holder’s life. recognized benefit in return. Maintenance, power of enables the Holding trust specific type of trust in trustees to apply the income generated by which the trustees simply obey the orders a trust fund for the maintenance of the of the principal, often used to conceal the beneficiaries, even where they are not as true identity of the principal. yet entitled to the capital of the fund. Implied trust the label given to a trust Mortgage the creation of a specific form of that has not been formally declared by charge (usually of land) to provide security the parties, but is found to exist by the for a loan. courts because the evidence indicates that the parties meant to create this kind of Mortgagee the person or company that obligation (either through a resulting or advances the loan and receives the mort- constructive trust). gage charge as security.

lxviii Glossary of common terms

Mortgagor the person or company that Privitya rule of common law that provides receives the loan and creates the mortgage that obligations can only be enforced by charge over their property in favour of the and against the parties to a transaction. mortgagee. Probandumsomething which has to be Nominee a person or company who holds proved. The plural is probanda, so that if the legal title to property and ostensibly the there are three probanda, there are three control of the property, but who must exer- things to be proved. cise it in accordance with the directions of Probatecourt authority approving a will their principal (person who appointed the given to an executor to begin the adminis- nominee or persons to whom the nomi- tration of a deceased person’s estate. nees owe their duty). Proprietary rights see Rights in rem. Notice, doctrine of an equitable doctrine Protective trust a specialized form of that affects the durability of equitable trust, which allows beneficiaries to receive property rights. Notice can be either actual income on the property, but preventing (being aware of rights) or constructive (the them from transferring the right to income rights would have been revealed if reason- to someone else (sometimes called a able enquiries had been made). spendthrift trust). Objects the persons who may benefit from Real property rights or interests relating property on the exercise of a distributive to land. power or discretionary trust. Receiver a person appointed (usually by Option a right to elect to create a bind- court order) to receive income payments ing contract to purchase property, when from property (e.g., on the bankruptcy of exercised. an individual). Overreaching a process by which the Remainder, interest in an interest asset value of beneficial interests in land is granted to take effect on the expiry of an transferred to the proceeds of sale, so that interest in possession (e.g., to Lucy for life, a purchaser takes free from the beneficial remainder to Raoul). The person entitled interests. to a remainder is known as a remainder- Pari passu a right to share in property man. equally and without preference. Residuary estate the final property of a Parol oral (e.g., a parol evidence lease is one deceased person, once all debts have been created without writing). paid and any specific gifts by will have Personal property rights or interests been made. relating to property other than land. Restitution the body of law designed to Personal rights see Rights in personam. prevent unjust enrichment of the defen- Possession, interest in an immediate dant by the claimant. entitlement to rights or income in property Resulting trust an implied trust in which (compare with an interest in remainder). the beneficial interest in property results Power an authority to do something (e.g., (comes back) to the person who trans- allocate property to beneficiaries). ferred the property. Principal person to whom obligations are Rights in personam rights that are en- owed under a relationship (e.g., agency, or forceable only against the person granting fiduciary). them (also known as personal rights). Priority to enforce a claim to property in Rights in rem rights that are enforce- preference to others. able against the whole world, not just the

Glossary of common terms lxix

person granting them (also known as Transferor person who transfers property proprietary rights). to another. Secret trust a specialized form of trust Trust although impossible to define ac- used to provide for someone on death, curately, it describes a form of property which is secret because it does not appear ownership in which the control and benefit in the will (fully secret) or does not dis- to property are separated, with legal title close the beneficiaries (half secret). and control vested in trustees who are Senior courts the new title of the High compelled by equity to exercise such con- Court and Court of Appeal. Until the trol for the benefit of the beneficiaries, who creation of the United Kingdom Supreme hold the equitable title. Court, these courts were known as the Ultra vires in excess of authority (beyond Supreme Court of Judicature. the powers of a body or person with lim- Settlor the person who creates a trust by ited authority). putting (settling) his property on trust. Value payment, usually in money or Spouse a married partner. money’s worth. Stranger to a trust a third party who is Vesting the satisfaction of all the require- neither the trustee nor beneficiary under ments necessary for a right to property to a trust, but who deals with trust property become unconditional; the completion of (e.g., a bank facilitating the deposit of trust the transfer of property to a person, so that funds in a trust account). they can begin to enjoy the rights in that property. Sui juris to be of full legal capacity. See Capacity. Void (ab initio) of no legal effect (from the outset). Supreme Court the court which in October 2009 replaced the House of Lords as the Voidable a transaction which can be set highest court in the United Kingdom. aside at the election of one party, but which is otherwise effective until set aside. Testamentary property transfers on death made by will (wills are also known as testa- Volunteer a person who has not given ments). consideration for a promise to have property settled on them on trust. Testator a male person who executes (creates) a will (a female person is known as a Will the instrument by which a person ‘testatrix’). declares what their wishes are concerning their property after their death. The terms Title a right to ownership of property. of the will do not take effect automatically, Transferee person who receives a transfer but have to be implemented by an executor of property. or administrator.