Term
| At what point do secret trusts / gifts take effect? |
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Definition
| On the death of the settlor. |
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Term
| What is the problem with using a fully secret trust? |
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Definition
| A fully secret trust will appear as an outright gift in the will (when the will is read in isolation from other documentation). If your trustee turns out to be a bit of a rouge, however, he could just run off with all the money & not tell people (the beneficiaries) that he is holding the money on trust to them. |
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Term
| What are the ways of getting around the inherent problems of the fully secret trust? |
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Definition
1) Tell the beneficiaries
2) Set up a half secret trust
3) Have more than one trustee |
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Term
| What does a half-secret trust look like in a will? |
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Definition
| The half-secret trust will make reference to the existence of a trust, but it will not refer to who the beneficiaries are. |
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Term
| What are the advantages and disadvantages of the HST? |
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Definition
Benefit = protects against rogue trustees
Disadvantage = you will arouse suspicions... people will know there is a trust, and they will know that you are keeping the beneficiaries secret. |
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Term
| Do instructions on the secret trust have to comply with s9 Wills Act? |
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Definition
| NO - instructions on secret trusts = an exception to the Wills Act. |
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Term
| What does s9 Wills Act do? |
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Definition
It sets out the validity requirements for a valid will.
in writing, signed by the testator, appears that the testator intended to give signature, witnessed & attested by at least two witnesses at the same time. |
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Term
| Which case confirms the requirements for setting up a secret trust? |
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Definition
| Kasperbauer v Griffith [2000] |
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Term
| Kasperbauer v Griffith [2000] (on requirements) |
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Definition
CONFIRMS THE REQUIREMENTS FOR A VALID SECRET TRUST + added that you need 'intention'
Communication to secret trustee
Acceptance by secret trustee
Reliance by testator (testator relies on acceptance by making a will, leaving a will unrevoked, or not making a will at all)
(you also need intention) |
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Term
| What are the requirements for a valid secret trust? |
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Definition
CAR (+ intention, Kasperbauer v Griffith)
Communication to secret trustee
Acceptance by secret trustee
Reliance by testator on trustee's acceptance (by making a will, leaving a will unrevoked, or not making a will at all) |
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Term
| Kasperbauer v Griffith [2000] |
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Definition
SET OUT REQUIREMENTS FOR A VALID TRUST, + ADDED THAT TESTATOR'S INTENTION MUST BE CLEAR, IT MUST BE CLEAR THAT THE PERSON SETTING UP THE TRUST INTENDED TO IMPOSE A BINDING LEGAL OBLIGATION ON THE TRUSTEE, NOT MERELY A MORAL OR FAMILY OBLIGATION.
In this case, testator statement = 'my wife knows what she has to do with the house'
HELD - intention was not clear. |
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Term
| Which two cases can be used to show that in addition to the CAR requirements of a ST, the settlor's intention to create a legally binding obligation must also be clear? |
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Definition
Kasperbauer v Griffith [2000]
Margulies v Margulies [2000] |
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Term
| Kasperbauer v Griffith [2000] (w.r.t legal obligation) |
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Definition
IT MUST BE CLEAR THAT THE PERSON SETTING UP THE TRUST INTENDED TO IMPOSE A BINDING LEGAL OBLIGATION ON THE TRUSTEE, NOT MERELY A MORAL OR FAMILY OBLIGATION
'my wife knows what she has to do with the house' = not clear what the intention was = no binding legal obligation |
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Term
| Margulies v Margulies [2000] (w.r.t legal obligation) |
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Definition
IT MUST BE CLEAR THAT THE PERSON SETTING UP THE TRUST INTENDED TO IMPOSE A BINDING LEGAL OBLIGATION ON THE TRUSTEE, NOT MERELY A MORAL OR FAMILY OBLIGATION
A father's ambiguous statements about the claimant's older brother 'knwing my wishes' and 'giving what's appropriate' = insufficiently clear = did not create a binding legal obligation |
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Term
| At what point must the fully secret trust be communicated to the trustees? |
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Definition
| At any point before the death of the settlor (can happen after execution of the will) |
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Term
| At what point must the half-secret trust be communicated tot he trustees? |
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Definition
| At any point before the execution of the will (CANNOT BE TOLD AFTER THE EXECUTION OF THE WILL) |
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Term
| Why are the rules different w.r.t when trustees to a secret / half-secret trust must be informed about the trust? |
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Definition
| IT'S JUST THE WAY THE LAW IS... NO EXPLANATION, THAT'S JUST HOW IT IS |
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Term
| If it is clear from the face of the will that the property is left on trust (HST), but the will does not contain the terms of the trust. What happens if the requirements for the HST are invalid? |
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Definition
| There will be a resulting trust. |
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Term
| If a settlor intended a FST, and the property appears in the will as an outright gift, what happens if the reuirements for the FST are invalid? |
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Definition
1) No communication w.r.t trusts existence = outright gift to intended trustees
2) No communication w.r.t property = resulting trust
3) No communication w.r.t terms = resulting trust
4) no communication to all trustees = outright gift to all those who weren't told (+ Re Stead exception). |
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Term
| Which case established that HST can be valid? |
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Definition
| Blackwell v Blackwell [1929] |
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Term
| Can a secret trustee be witness to a will? |
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Definition
Not confirmed, but probably yes.
The wills act = witness cannot benefit under the will. w.r.t HST = OK, everyone knows that the trustee they won't benefit.
However, w.r.t FST, on the face of it, it will appear as though the trustee is actually receiving a gift... therefore, possible can't be a witness.
HOWEVER, technically, they aren't receiving a gift... therefore, technically, they should be allowed to witness. |
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Term
| What happens if a secret trustee dies before the testator, or tries to disclaim the legacy? |
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Definition
w.r.t FST - Re Maddock - the trust will fail if the trustee predeceases the testator, or disclaims the gift.
HOWEVER, Blackwell v Blackwell = a FST trustee cannot defeat the trust by death or disclaimer.
w.r.t half-secret trusts, as people will know that a trust exists, the principle that 'equity will not permit a trust to fail for want of a trustee' might be applied. |
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