Trusts of Land (Part A)
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Questions and Answers

What is a condition that trustees may impose on a beneficiary with a right to occupy?

  • Beneficiary must vacate the property if asked.
  • Beneficiary must limit occupation to family only.
  • Beneficiary must pay rent to the trustee.
  • Beneficiary must keep the place clean. (correct)

    • Under what circumstance can occupation rent be imposed by courts?

  • If the beneficiary agrees to pay part of the capital.
  • When the property is unsuitable for occupation.
  • When beneficiaries are equally occupying the property.
  • If one beneficiary is not occupying without justifiable reason. (correct)

    • Which principle allows for the imposition of occupation rent in the case of a trust?

  • The principle of statutory rights.
  • The principle of trustee discretion.
  • The principle of beneficiary equality.
  • The principle of equitable accounting. (correct)

    • What is required for a beneficiary already in occupation to be asked to leave?

    <p>A court order must be obtained.</p> Signup and view all the answers

    Which of the following statements about the right to occupy is true?

    <p>Beneficiaries cannot occupy if the property is unavailable.</p> Signup and view all the answers

    What distinguishes legal ownership from equitable ownership in a trust?

    <p>Legal ownership is recognized in law, while equitable ownership is recognized in equity.</p> Signup and view all the answers

    Which of the following best defines the role of a trustee?

    <p>The person who holds legal title and administers the trust for the beneficiary.</p> Signup and view all the answers

    Which of the following types of trusts does S1(1) TLATA 1996 refer to?

    <p>All trusts that include land, regardless of their creation date.</p> Signup and view all the answers

    What is required for the declaration of an express trust of land, according to S53(1)(b)?

    <p>It must be documented in writing and signed by someone capable.</p> Signup and view all the answers

    What describes a resulting trust?

    <p>A trust inferred from the circumstances or actions of the parties.</p> Signup and view all the answers

    In a joint tenancy, how is the legal estate held according to S36(1) LPA 1925?

    <p>It is held in trust for the benefit of all co-owners.</p> Signup and view all the answers

    What is a characteristic of an implied trust of land?

    <p>It arises from the behavior or circumstances of the involved parties.</p> Signup and view all the answers

    What is required for a beneficiary of full age to petition for land under S7(1) TLATA 1996?

    <p>Consent of other beneficiaries</p> Signup and view all the answers

    Under S9(1) TLATA 1996, who has the power to delegate functions related to the trust?

    <p>Only beneficiaries with an interest in possession</p> Signup and view all the answers

    How many trustees are required to create a trust of land?

    <p>Minimum of one and a maximum of four.</p> Signup and view all the answers

    What statutory right do beneficiaries have under S6(2) TLATA 1996?

    <p>Right to terminate the trust</p> Signup and view all the answers

    What does S4(1) TLATA 1996 grant trustees regarding the sale of trust assets?

    <p>The power to postpone sale</p> Signup and view all the answers

    What obligation do trustees have according to S11(1) regarding beneficiary consultation?

    <p>They must consult beneficiaries as far as practicable</p> Signup and view all the answers

    What right do beneficiaries have under S19(2) TLATA 1996?

    <p>Right to direct trustees in appointments and retirements</p> Signup and view all the answers

    Under S12(1) TLATA 1996, who is entitled to occupy trust land?

    <p>Beneficiaries entitled to an interest in possession</p> Signup and view all the answers

    What requirement can trustees seek to remove according to S14 TLATA 1996?

    <p>Requirement for unanimous consent for functions</p> Signup and view all the answers

    Who typically appoints trustees for an express trust?

    <p>The settlor of the trust</p> Signup and view all the answers

    What is the ideal number of trustees to have according to S2(1)(ii) LPA 1925?

    <p>Two to four trustees</p> Signup and view all the answers

    Which section allows beneficiaries to direct the appointment of trustees?

    <p>S19 TLATA 1996</p> Signup and view all the answers

    What is the primary duty of trustees when exercising their powers according to S6(5) TLATA 1996?

    <p>To regard the interests of beneficiaries</p> Signup and view all the answers

    In which scenario can a trustee be removed or replaced?

    <p>If all beneficiaries are unanimous in a written direction</p> Signup and view all the answers

    What powers do trustees of land have according to S6(1) TLATA 1996?

    <p>All the powers of an absolute owner, but limited by settlor agreements</p> Signup and view all the answers

    What must be done when a trustee is to be removed as per S19 TLATA 1996?

    <p>Beneficiaries must act unanimously and provide a written direction</p> Signup and view all the answers

    Which of the following powers is NOT listed under S6 TLATA 1996?

    <p>Power to approve trust account audits</p> Signup and view all the answers

    Study Notes

    Trusts of Land (Part A)

    • A trust is an instrument that allows ownership of property to be split between owner/title recognised in law (legal owners) and legal ownership/title (beneficial owners, or beneficiaries).

    What is a Trust?

    • Trusts are legal instruments that separate the legal ownership of property from the beneficial ownership.
    • The legal owner holds the legal title (with associated rights and responsibilities) while the beneficial owner (or beneficiary) has the enjoyment of the property.

    Development of Trusts Through Equity

    • Legal title is given to someone to hold for administrative purposes, with the aim of benefiting another party.
    • The "true" owner is excluded, and the holder of legal title wants to enjoy the property for their own benefit.
    • This goes against the original agreement, which is where equity steps in.

    Terminology

    • Settlor: The person who establishes the trust.
    • Trustee: The person who holds the legal title to the property and owes fiduciary duty to the beneficiary. They also act in the beneficiary's best interest and manage the property accordingly. A minimum of one trustee is needed, and a maximum of four is allowed.
    • Beneficiary: The person who enjoys the beneficial ownership and benefit from the trust property. A minimum of one beneficiary is needed, with no maximum.

    What is a Trust of Land?

    • Legislation (S1(1) TLATA 1996) defines any trust that includes land, referencing different types of trust descriptions.
    • Includes trusts of land created before the commencement date of this Act.
    • Defines legal estate in joint tenancy (S36(1) LPA 1925)- legal title held in trust.
    • Statutory trusts (S34 (2) LPA 1925) are imposed where land is conveyed to tenants in common.

    Trust of Land Created

    • Trusts can be created expressly (through declaration of trusts, manifested or proved by writing, signed by the settlor, or declared in a will).
    • Trusts can be implied from circumstances. (Resulting/constructive)
    • No formal requirements for implied trusts (no writing or other needed formalities).

    Co-ownership

    • S36(1) LPA 1925: when legal title is held in co-ownership (joint tenancy) as trust of land.
    • S34(2) LPA 1925: When beneficial title is held in co-ownership (tenancy in common), it will be held as a trust of land.

    Powers and Duties of Trustees

    • Trustees have the power of an absolute owner but cannot exercise those powers in violation of the law or equity.
    • Their duty is to care for the trust, exercise reasonable skill and care, and consider the rights of beneficiaries.
    • The settlor can require the trustee to obtain consent before exercising certain powers.

    Powers of Trustees

    • Trustees have the right to acquire or partition land.
    • Trustees can compel beneficiaries to accept conveyance of the land, and can postpone sale.
    • The trustee has the power to delegate functions to beneficiaries/
    • Restrictions may exist based on terms of the trust.

    Duties of Trustees

    • Trustees have a duty to consult with beneficiaries.
    • Trustees are required to consider beneficiaries' wishes. If the majority of beneficiaries have a wish, those wishes should be adhered to.
    • If the wishes of the majority are excluded, they can’t compel the trustee to act in a certain way.

    Beneficiary Rights

    • Beneficiaries have the right to be consulted by the trustee(s).
    • Beneficiaries can appoint (or remove) a trustee (acting unanimously, with a written direction).
    • Beneficiaries can require consents before exercising any function on the trust land.

    Right to Occupy Trust Land

    • Beneficiaries with a right to possession may occupy the land.
    • Occupation needs no right to possess
    • Trustees may put stipulations on occupation.
    • Beneficiaries who currently occupy may be required to pay certain outgoings.

    Ultimate Right of the Beneficiary

    • The ultimate right for beneficiaries is to have an appropriate interest in the trust property (capital proceeds)

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    LAW2100 – Land Law Lecture 6 PDF

    Description

    This quiz covers the fundamental concepts of trusts in property law, focusing on the distinction between legal and beneficial ownership. It explores the roles of settlors and trustees, as well as the historical development of trusts through equity. Test your knowledge on how these legal instruments operate and the terminology used in trust law.

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