Trust Law and Testament

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.