Questions and Answers
According to Sachs LJ, evidential uncertainty regarding whether a given individual is within the class of beneficiaries does not matter as long as the class of persons to be benefited is conceptually certain.
True
According to Stamp LJ, the test rejected by the House of Lords in Re Gulbenkian’s Settlement Trusts is that the trust is good if there are individuals, or even one, of whom you can say with certainty that he is a member of the class, notwithstanding that there may be others whose status is uncertain.
True
According to Templeman J in Re Manisty’s Settlement, a power to benefit 'residents of Greater London' would be considered capricious and therefore invalid.
True
According to Lord Evershed MR in Re Endacott, a trust in English law, not being a charitable trust, must have ascertained or ascertainable beneficiaries in order to be effective.
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Which case led to the change in treatment of discretionary trusts?
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According to the House of Lords, what is the test for the validity of a discretionary trust?
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What happens in case of uncertainty of objects in a trust?
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According to Lord Eldon, what are the three certainties required for a trust to be valid?
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What does the certainty of words requirement mean?
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In the case of Re Kayford Ltd, how was a trust established?
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Which of the following is NOT a requirement for establishing a trust?
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In the case of Abrahams v Trustee in Bankruptcy of Abrahams, what was held to be property capable of being held on a resulting trust?
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What was the subject of the alleged trust in Palmer v Simmonds?
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What was the basis for upholding the trust in Hunter v Moss?
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When is a requirement to keep moneys separate an indicator of a trust?
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In the case of Sprange v Barnard, what was the outcome of the dispute over the testatrix's property?
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When will the beneficial interests in a trust fail for uncertainty?
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In the case of Re Golay, what was the outcome of the dispute over the testator's flats?
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Under what circumstances will a trust be created in a will?
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When did the courts change their approach to precatory words in wills?
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Which case is sometimes considered the turning point in the change of approach by the courts?
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When will a trust be created by precatory words in a will?
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What is the difference between a fixed trust and a discretionary trust?
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What happens if a trust power in the first sense is implied by the court?
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What happens if there is uncertainty in a trust in default of appointment?
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What is the test for a valid mere power?
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Study Notes
Validity of Trusts: The Three Certainties
- Lord Langdale's judgment in Knight v Knight established the "three certainties" required for a trust to be valid: certainty of words, certainty of subject, and certainty of object.
- The certainty of words refers to the intention of the settlor, and technical expressions are not necessary to constitute a trust.
- Precatory words, such as expressing confidence or desire, may or may not create a trust, depending on the overall construction of the will or trust document.
- The courts' approach to precatory words changed during the nineteenth century, with a more restrictive interpretation being applied.
- The certainty of subject requires identifiable trust property, regardless of its nature.
- Trusts can be established for various types of property, including chattels, choses in action, rights or obligations under contracts, land, and money.
- The phrase "certainty of subject matter" can refer to the property subject to the trust or the beneficial interests of the beneficiaries.
- Trusts fail if the trust property cannot be clearly identified, as in cases where the subject is described as "the bulk of my residuary estate."
- The Court of Appeal decision in Hunter v Moss created uncertainty regarding the requirement of certainty for intangible assets, such as shares.
- The court held that the certainty of intangible assets depends on whether the court could make an order for the execution of the trust immediately after its declaration.
- This decision has been criticized, as intangible assets should not be treated differently from tangible assets, and the analogy to a demonstrative legacy of shares is not valid.
- The normal rules of construction apply to trust documents, but a benignant or purposive construction may be given in certain cases, such as for charitable gifts or to save a gift for charity.
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