W6 | Express Trusts: Concept Certainty & Creation

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Questions and Answers

What primary role does the trustee have in a trust arrangement?

To benefit from the property transferred

To transfer the property back to the settlor

To manage the property for specified beneficiaries (correct)

To create legal personality for the trust

In the context of trust law, what is meant by 'equitable interest'?

The legal ownership of the property by the trustee

The interest of the settlor in the trust arrangement

The legal personality of the trust itself

The right of the beneficiaries to enforce their claim to the property (correct)

Which case illustrates the principle that beneficiaries can enforce their rights even before receiving property?

Brown v. Carter

Smith v. Jones

Taylor v. Phillips

Saunders v. Vautier (correct)

What distinguishes the intention to create a trust from mere wishes or gifts?

The legal ownership by the trustee on behalf of beneficiaries Signup and view all the answers

Which type of trust involves the settlor explicitly declaring their intentions regarding property management?

Express trust Signup and view all the answers

What is a key factor in determining if an express trust has been created?

The settlor's intention to create an express trust Signup and view all the answers

Which of the following best defines 'Certainty of Intention' in the context of trusts?

The settlor's explicit statement of wishes Signup and view all the answers

Which requirement must be fulfilled for a trust to be enforceable?

The trust must have a clear beneficiary Signup and view all the answers

In the context of trust creation, what does subjective intention refer to?

Personal beliefs and motivations of the settlor Signup and view all the answers

What is a distinctive feature of a charitable trust?

It serves a public purpose rather than private benefit Signup and view all the answers

What type of trust allows the trustee to exercise discretion in distributing assets?

Discretionary trust Signup and view all the answers

What is an express trust primarily concerned with?

Clear and specific instructions from the settlor Signup and view all the answers

Which of the following is an exclusion under the Personal Properties and Securities Act (PPSA) regarding trusts?

Trust over a financial accommodation amount Signup and view all the answers

What is a requirement for the creation of an express trust regarding intentions?

Certainty of words Signup and view all the answers

Which of the following is NOT a method of creating an express trust?

By verbal agreement Signup and view all the answers

What must an express trust demonstrate to fulfill the certainty of object requirement?

Clearly defined beneficiaries Signup and view all the answers

Which type of express trust allows a trustee to decide on the beneficiaries?

Discretionary trust Signup and view all the answers

Which of the following describes certainty of subject in an express trust?

Specification of the property held in trust Signup and view all the answers

What aspect does subjective intention refer to in trust law?

Explicit statements made by the settlor Signup and view all the answers

What is a characteristic of a charitable trust?

Must serve a purpose recognized as charitable Signup and view all the answers

Which of the following best defines the certainty of intention in establishing a trust?

The settlor must express a desire to create a trust Signup and view all the answers

Which type of trust specifically benefits individuals, such as family members?

Private trust Signup and view all the answers

What defines the certainty of object in the context of a trust?

The specific beneficiaries of the trust Signup and view all the answers

Study Notes

Express Trusts

There are three types of express trusts: private, charitable, and discretionary.
Private trusts are created for the benefit of individuals.
Charitable trusts must be for a purpose that is recognized as charitable.
Discretionary trusts allow the trustee to decide who will benefit or the quantum of each share.
To create a trust, there must be a certainty of words, intention, subject, and object.

Certainty Requirements

The object or objects of a trust are the beneficiaries.
There must be a certainty of intention for a trust to be enforceable.
The trustee owes fiduciary duties to the beneficiaries.
The rule in Saunders v Vautier states that beneficiaries can demand the entire trust property at any time.
The settlor transfers property to the trustee upon trust for the beneficiary.
The trustee has legal interest in the property.
The beneficiary has an equitable interest in the property.
Property can be tangible or intangible.

Trust as distinct from a Gift

A trust is distinguishable from a gift because the trustee has legal ownership of the property, while the beneficiary has an equitable interest.

PPSA Exclusions

The PPSA (Personal Properties and Securities Act) excludes certain interests from its application, such as trusts.
This includes transfers of beneficial interest in monetary obligations where the transferee holds the monetary obligation on trust for the transferor, and trusts over financial accommodation, if the recipient must use it according to conditions.

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Description

This quiz covers the fundamentals of express trusts, including the different types such as private, charitable, and discretionary trusts. It also explores the requirements for certainty and the roles of trustees and beneficiaries. Test your understanding of the essential principles governing trusts and their enforceability.