Equity and the Law of Trusts Chapter 3 § 1

Study Notes

Capacity of Settlor and Beneficiaries in Trusts

A valid trust requires the creator of the trust to have the power to create it and the beneficiaries to have the ability to accept the equitable interests conferred on them.
The capacity of a person to be a settlor or beneficiary is determined by section 1 of the chapter.
The three certainties are necessary for a trust to be valid: certainty of words, certainty of subject, and certainty of objects.
The beneficiary principle requires that a trust must be for the benefit of individuals, with exceptions for charitable trusts.
Trusts for unincorporated associations present difficulties due to their lack of legal personality.
Minors cannot hold a legal estate in land and, therefore, cannot settle it, but they can make voidable inter vivos settlements.
Minors cannot make a valid will, except in specific circumstances.
The validity of a trust created by a will or inter vivos settlement may be challenged based on the mental capacity of the person creating the trust.
The Mental Capacity Act 2005 governs the making of wills or settlements for persons lacking mental capacity.
A person is assumed to have capacity unless proven otherwise, and capacity is determined based on impairment or disturbance in the functioning of the mind or brain.
The Court of Protection can make orders on behalf of a person lacking capacity in relation to their property and affairs, including the creation of settlements or execution of wills.
Anyone who can hold an interest in property can be a beneficiary under a trust, including minors who can have an equitable interest in land.