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Questions and Answers
Which beneficiary classification is least likely to be upheld in a private trust?
Which beneficiary classification is least likely to be upheld in a private trust?
What is a potential consequence of a violation of the rule against perpetuities in trust law?
What is a potential consequence of a violation of the rule against perpetuities in trust law?
How does freedom of disposition in private trusts relate to discrimination laws?
How does freedom of disposition in private trusts relate to discrimination laws?
In relation to resulting trusts, which scenario is most indicative of an intention to create such a trust?
In relation to resulting trusts, which scenario is most indicative of an intention to create such a trust?
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Which statement best reflects how discrimination may influence private trusts?
Which statement best reflects how discrimination may influence private trusts?
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What does an express trust require regarding the classification of beneficiaries?
What does an express trust require regarding the classification of beneficiaries?
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In the context of trusts, what is a resulting trust most likely to arise from?
In the context of trusts, what is a resulting trust most likely to arise from?
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What does the rule against perpetuities generally seek to prevent?
What does the rule against perpetuities generally seek to prevent?
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How does statutory public policy typically address dispositions intended to defeat creditors?
How does statutory public policy typically address dispositions intended to defeat creditors?
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What is the main purpose of s37A as discussed in the case of Marcolongo v Chen?
What is the main purpose of s37A as discussed in the case of Marcolongo v Chen?
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What happens if a purported trust is incomplete and the settlor is still alive?
What happens if a purported trust is incomplete and the settlor is still alive?
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What occurs when property is transferred to a would-be trustee but the trust is not completely constituted?
What occurs when property is transferred to a would-be trustee but the trust is not completely constituted?
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If a declaration of trust is made after the transfer of property, what will be its effect?
If a declaration of trust is made after the transfer of property, what will be its effect?
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What can cure an incomplete trust if the intended beneficiary has provided consideration?
What can cure an incomplete trust if the intended beneficiary has provided consideration?
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Which scenario would cause a trust to fail according to societal norms?
Which scenario would cause a trust to fail according to societal norms?
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What must occur for a trust to be effectively constituted?
What must occur for a trust to be effectively constituted?
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What is the consequence if a settlor dies before an express trust is fully constituted?
What is the consequence if a settlor dies before an express trust is fully constituted?
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What effect does giving valuable consideration have on an incomplete trust agreement?
What effect does giving valuable consideration have on an incomplete trust agreement?
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Study Notes
Statutory Public Policy and Trusts
- The term "defraud" in s37A of the Statute of Elizabeth 1571 should be interpreted in the same way as the Elizabethan statute.
- The court should give a liberal construction to s37A to ensure the purpose of suppressing fraud.
- Anti-avoidance provisions give courts the power to set aside dispositions, including trusts created to defeat a court order.
- A voluntary transfer of property for illegal purposes could mean a resulting trust for the transferor.
Express Trusts and Discrimination
- Express trusts can define beneficiaries based on factors like gender, religion, and sexual orientation.
- Express trusts are upheld because the law favors freedom of disposition.
- Modern equal opportunity and anti-discrimination laws do not apply to private trusts.
Marcolongo v Chen
- Marcolongo sued a company (Lyn) for building works that damaged her property.
- Lyn, owned by Yang, transferred its only substantial asset to Chen.
- The transfer was designed to protect the assets from potential action by the Chinese government.
- The court set aside the transfer under s37A because it was intended to defeat Marcolongo's claim.
Incomplete Trusts
- If a trust is not fully constituted, the settlor continues to hold the property if the trust fails by declaration.
- If the property is successfully transferred to the intended trustee, the trustee holds the property on resulting trust for the settlor and must re-transfer it.
- If the settlor is no longer alive, the court may recognise the existence of the trust even if not fully constituted.
Non-Simultaneous Declaration and Vesting
- A declaration of trust made after the transfer of property is ineffective.
- A declaration of trust made before the transfer is effective if the transfer takes place subsequently.
- An agreement to trust may cure the process, especially if valuable consideration is provided by the intended beneficiary.
Trusts and Public Policy
- Trusts that are contrary to public policy may fail, such as trusts designed to prejudice the administration of justice, commit a legal wrong, or undermine the institution of marriage.
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Description
Explore key concepts related to statutory public policy and express trusts. This quiz covers important legal interpretations, anti-avoidance provisions, and the impact of discrimination laws on trusts. Test your knowledge of landmark cases like Marcolongo v Chen and their implications in trust law.