Trusts

Question 1

Types of Express Private Trusts

Answer 1

1. Fixed
2. Discretionary
3. Purpose

Question 2

Express Private Trusts Key Requirements

Answer 2

1. Express Intention
2. Subject Matter
3. Object

Question 3

Number of Trustees Required

Answer 3

Usually 1 (2-4 for Land)

Question 4

Rules Against Perpetuity

Answer 4

1. Contingent interest void if it does not vest within 125 years
2. Noncharitable trusts - limited to 21 years or life in being plus 21 years

Question 5

Inter Vivos Trusts

Answer 5

1. Trusts created during lifetime
2. Settlor can declare themselves trustee
3. Trust with another as Trustee

Question 6

Exceptions to “Equity will not Assist a Volunteer”

Answer 6

1. Every Effort Test
2. Donatio Mortis Causa
3. Rule in Strong v Bird
4. Proprietary Estoppel

Question 7

Requirements of Testamentary Trust

Answer 7

1. Valid Will
2. Appropriate Trustee
3. No breach of perpetuity rules
4. No transfer requirement at the time of creation

Question 8

Secret Trust Fails if

Answer 8

1. Trustee fails to accept
2. Did not know until after settlor’s death

Question 9

Half Secret Trust requires

Answer 9

communication of beneficiary’s identity must be made on or before will execution

Question 10

Fixed Trusts: Vested Interest

Answer 10

No condition attached to interest

Question 11

Fixed Trusts: Contingent Interest

Answer 11

Condition attached to interest

Question 12

Fixed Trusts: Limited Interest

Answer 12

No Right to Trust Capital

Question 13

Fixed Trust: Absolute Interest

Answer 13

Right to Capital and Income

Question 14

Rule in Saunders v Vautier

Answer 14

1. Terminate Trust
2. If all beneficiaries have absolute interest, adults and sound of mind
3. Can apply to fixed or discretionary

Question 15

Resulting Trust Arises

Answer 15

1. Voluntary Transfer or Purchase in Name of Another
2. Failure to Exhaust Beneficial Interest under Express Trust

Question 16

Requirements for Resulting Trust in Real or Personal Property

Answer 16

1. Money used to purchase property
2. Money must be provided at or before time title vests in trustee
3. Claimant has burden of proving they paid towards purchase

Question 17

Presumption of Advancement in Resulting Trusts

Answer 17

Under the obligation to provide for the other party (look at relationship)

Question 18

Family Homes: Legal Title in One Name - Proprietary Estoppel

Answer 18

1. Assurance
2. Reliance on Assurance
3. Detriment

Question 19

Common Intention Constructive Trust

Answer 19

1. Common Intention
2. Reliance to Claimant’s Detriment

Question 20

Charitable Trusts: Rules Against Perpetuity

Answer 20

1. Does not apply
2. Initial gift within 80 years
3. subsequent gifts from charity can happen anytime

Question 21

Requirements for Charitable Trusts

Answer 21

1. Fall within defined charitable purpose
2. Public benefit
3. Exclusively charitable

Question 22

Cy-Pres Doctrine

Answer 22

1. Applies to Charitable Trusts
2. Impossible or Impractical, Court will apply trust property to similar charitable purpose
3. Initial failure: General Charitable Intent Required
4. Subsequent Failure: No Charitable Intent Required

Question 23

Denly Trust

Answer 23

1. Human beneficiaries can enforce trust

Question 24

Honorary Trust

Answer 24

Perpetuity Period applies: Human life in being plus 21 years

Question 25

Hierarchy of power to replace trustees

Answer 25

1. Document 2. Continuing trustees 3. Personal representatives 4. Court

Question 26

Retirement without appointing (2)

Answer 26

1. Consent of co-trustees and any person named in trust document 2. At least two trustees or trust corporation must remain in office

Question 27

Duty Not to Profit from Trusteeship

Answer 27

1. When trustee can prove that they were going to be appointed director anyways

Question 28

Duties of Trustees

Answer 28

1. Deal appropriately with the trust property 2. Statutory duty of care 3. Traditional duty of care 4. Act jointly if there is more than 1 trustee 5. Act personally and not delegate 6. Take possession of trust property 7. Keep accounts and records 8. Act impartially and treat them all equally 9. Confidentiality 10. Invest

Question 29

Duty to Invest (4)

Answer 29

1. Authorised investments 2. Criteria 3. Advice of Investments 4. Review

Question 30

Power of Maintenance

Answer 30

1. Interest in income 2. Paid directly to school or parent/guardian 3. Ends when beneficiary turns 18

Question 31

Power of Advancement

Answer 31

1. Vested, Remainder, Contingent Interest 2. Amount must not exceed entitlement 3. Advances must be factored into final distribution 4. Consent of person with prior interest is required

Question 32

Liability of Trustees

Answer 32

1. Only trustees responsible liable 2. When more than one - liability joint and several 3. 6 year limitation period

Question 33

Bona Fide Purchaser Liability

Answer 33

1. Paid in good faith and without notice 2. No claim against person

Question 34

Innocent Volunteer Liability

Answer 34

1. No personal claims 2. Proprietary claims allowed

Question 35

Knowing recipient

Answer 35

1. Beneficiaries can bring personal claim 2. Proprietary claims allowed

Question 36

Dishonest Accessory

Answer 36

1. Personally liable 2. Can be active or passive 3. Proprietary claims unlikely