Equity and the Law of Trust Chapter 7 § 1

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Questions and Answers

What is the first section of this chapter about?

Cases where a will gives property to a legatee or devisee beneficially (correct)

Cases where a will is revoked and a new one is made

Cases where two persons make wills with similar provisions

Cases where a will gives property to a trustee without stating the trusts

What is a fully secret trust?

A case where a will gives property to a trustee without stating the trusts

A case where a testator leaves property to someone on the face of the will, but intends for them to keep it for themselves

A case where two persons make wills with similar provisions but one of them revokes their will

A case where a testator leaves property to someone on the face of the will, but informs them that it is for certain persons or charitable purposes (correct)

What difficulty was felt in enforcing fully secret trusts?

Communicating the trusts to the legatee or devisee

Determining the intentions of the testator

Compelling the trustee to carry out the trusts

Reconciling the result with the provisions of the Wills Act 1837 (correct)

Evidence of a prior notification of a half-secret trust is admissible if it contradicts the terms of the will.

False Signup and view all the answers

In the case of a half-secret trust, communication and acceptance of the trust must be prior to, or contemporaneous with, the execution of the will.

True Signup and view all the answers

A person named as a trustee in a will is permitted to set up any beneficial interest in himself.

False Signup and view all the answers

The courts in Australia have refused to apply the English rule regarding the communication of a half-secret trust before the testator's death.

True Signup and view all the answers

Which of the following is required to raise a trust in the case of a secret trustee?

The testator's intention communicated to the secret trustee Signup and view all the answers

When must the communication to the secret trustee take place?

During the testator's lifetime Signup and view all the answers

What happens if the alleged secret trustee only learns of the trust after the testator's death?

The trust will be ineffective Signup and view all the answers

What is the consequence of communicating only the fact of the trust to the secret trustee?

The secret trustee will hold on trust for the residuary devisees or legatees Signup and view all the answers

What happens if the trustees have not communicated the trusts to each other by the time the will is executed?

The trustees hold the property on trust for the residuary devisees or residuary legatees Signup and view all the answers

What happens if one or some of the trustees have accepted the trust before the date of the will?

The gift to the trustees as joint tenants is binding on all trustees Signup and view all the answers

What was the outcome in the case of Re Cooper regarding the secret trusts?

The secret trusts were effective as to the first £5,000, but failed as to the additional £5,000 given by the codicil Signup and view all the answers

What is the main purpose of a secret trust?

To enforce the secret trust in favor of the secret beneficiary Signup and view all the answers

What happens to a secret trust if the evidence shows that the testator intended to impose a mere moral obligation on the alleged secret trustee?

The secret trust will not be enforced and there will be a resulting trust to the estate Signup and view all the answers

What is the difference between a half-secret trust and a fully secret trust?

A half-secret trust is expressed in the will, while a fully secret trust is not expressed in the will Signup and view all the answers

In the case of Re Young, what was the issue related to the Wills Act 1837?

The issue of whether a legacy to an attesting witness is ineffective Signup and view all the answers

What is the better view regarding the failure of a secret trust when the secret trustee predeceases the testator or disclaims the devise or legacy?

The secret trust fails because it only affects the property by reason of the personal obligation binding the individual devisee or legatee. Signup and view all the answers

How are secret trusts categorized by different authors?

Some authors treat secret trusts as express trusts, while others categorize them as constructive trusts. Signup and view all the answers

What is the difficulty in enforcing a secret trust that is based on the expressed intention of the testator?

The requirement of writing under s 53(1)(b) of the Law of Property Act 1925. Signup and view all the answers

What is the standard of proof required to establish a secret trust?

The ordinary civil standard of proof required to establish an ordinary trust. Signup and view all the answers

Study Notes

Enforcement of Secret Trusts in Wills

The first section of this chapter discusses two cases: one where a will appears to give property to a beneficiary, but they have agreed to hold it as a trustee for others, and another where the will explicitly states that the property is given as a trustee, but does not specify the trusts.
The Court of Chancery would enforce fully secret trusts, even though they did not comply with the formal requirements of the Wills Act 1837, as it would be fraud for the secret trustee to deny the trust and keep the property for themselves.
Recent cases have established that secret trusts operate outside the will and are not considered testamentary dispositions under the Wills Act 1837.
A half-secret trust is when the will declares that the property is given on trust, but does not specify the trusts in the will itself.
The validity of half-secret trusts was initially more difficult to establish, but it has been determined that they are enforced on the same principles as fully secret trusts.
In cases of half-secret trusts, if a beneficiary predeceases the testator, their share may pass to their personal representative, as their title arises from the trust created during their lifetime.
Secret trusts can be enforced even if the existence of the trust is disclosed in the will, as they operate outside the will based on the expressed intention of the testator communicated to and accepted by the secret trustee.
There is no general agreement on whether secret trusts are express or constructive trusts.
Writing may be required for secret trusts involving land under the Law of Property Act 1925, but there have been cases where parol evidence was accepted for the validity of a secret trust of land.
The doctrine of secret trusts may also apply to inter vivos gifts, but it is debated whether it is applicable only to trusts created by will.
The existence of a secret trust must be established by evidence, and the standard of proof is the ordinary civil standard required to establish an ordinary trust.
If a secret trust can only be found by holding the legatee guilty of fraud, then it should not be established unless the standard of proof suffices for fraud.

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Test your knowledge on Fully Secret Trusts with this quiz. Learn about the essential factors required to establish a trust and the communication of intentions between the testator and secret trustee. Explore the concept of dispositions and promises within secret trusts.