16 Questions
What is the primary purpose of a trust?
To hold and manage property for the benefit of another person
What is the name of the division of the High Court that deals with disputes concerning wills and trusts?
Court of Chancery
What is the type of interest that William is regarded as owning in the land?
Equitable interest
What is the name of the Acts that fused the administration of equity and common law?
Judicature Acts 1873 and 1875
What is the purpose of the equitable intervention in the case of William and Percy?
To prevent Percy from enforcing his legal rights unconscionably
What is the age at which Paul should transfer all of Denise's property to Kylie?
21
Who is the legal owner of Denise's property after her death?
Paul
What is the relationship between Denise and Paul?
Partner and partner
What is the essential characteristic of a trust?
The trustee manages the property for the benefit of the beneficiary
What are the two main steps to create a trust?
Make a declaration of trust and transfer the trust property to the trustee
What is the role of the settlor in a trust?
To create the trust in their lifetime or by a will
What is the key difference between a trust and an outright gift?
A trust separates the management of property from the benefits
Who holds the legal title to the trust property?
The trustee
What is the equitable interest in trust property?
The right to benefit from the trust property
What is the role of the trustee in a trust?
To manage the trust property for the beneficiary
What is the key feature of a trust?
Separation of legal and equitable interests in trust property
Study Notes
What is a Trust?
- A trust is an equitable obligation that binds a person (trustee) to manage property (trust property) for the benefit of others (beneficiaries).
- The trustee holds the legal title to the property, while the beneficiary owns the equitable interest.
Creation of a Trust
- To create a trust, a settlor/testator must:
- Make a declaration of trust
- Transfer the trust property to the trustee
Key Roles in a Trust
- Settlor: The person who creates the trust in their lifetime
- Testator/ Testatrix: A person who creates a trust by a will, which takes effect when they die
- Trustee: Appointed and created by the settlor to manage the property for the beneficiary
- Trustee Duties: Strict duties governing the administration of the trust
- Trust Property: Can be various types of assets, such as bank accounts, savings, shares, property, etc.
- Beneficiary: The person who receives the benefit or enjoyment of the trust property
Why Create a Trust?
- An alternative to an outright gift
- Separates the management of property from the benefits or enjoyment
Case Study: Denise Barlow's Will
- Denise Barlow, a single parent, made a will leaving her property to her partner, Paul Jackson, to hold on trust for the benefit of her daughter, Kylie, until she is 21
- Paul, as the trustee, has a duty to manage the property for Kylie's benefit, but he has a gambling addiction and wants to use the property to pay off his debts
Historical Development of Trusts
- Before the trust law existed, there was a precursor to the trust
- In 1274, William transferred his land to Percy to look after it while he was away on a crusade
- When William returned, Percy refused to give back the land, and the common law courts would not intervene
- William had to seek redress in equity by petitioning the King, which later became the Court of Chancery
- The Court of Chancery still exists as a division of the High Court and deals with disputes concerning wills and trusts
This quiz is about understanding trusts, types of trusts, and beneficiaries' rights. It also involves analyzing a will and testament to determine the rights of the beneficiaries.
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