re hay's settlement trust case summary

Following the expiration of 21 years from the date of the original settlement the trustees You should not treat any information in this essay as being authoritative. This is an excellent way of ensuring an equitable outcome for the known beneficiaries who it would surely be wrong to disinherit on the basis of an absence of others, over whom they have no control while giving absent beneficiaries notice of their rights. Now, legislation in each jurisdiction gives a general power of investment, and trustees may invest trust funds in any form of investment and vary the investments at any time, unless expressly prohibited by the trust deed. startxref In the immediate case, a deed was drawn up in order to provide monetary benefit to members of staff of a company as well as the relatives and dependants of such people. In Re Hays Settlement Trust, the court held that it would be prepared to hold that an intermediate trust (one excluding certain specified individuals, and including everyone else) would be administratively unworkable because the a trustees obligations in relation to a discretionary trust are more stringent than for a power of appointment: as trustees are under an obligation to distribute trust property, they would have to carry out a wider and more systematic survey than those with power of appointment. If a trust instrument contains an express power it is normally in clear terms to that effect. However section 3(3) of the 1985 Act provided that, subject to any condition or restriction in the instrument, an attorney under an enduring power, whether general or limited, might execute or exercise all or any of the trust powers or discretions vested in the donor as trustee and might give a valid receipt for capital or other money paid. It was held that a mere power of appointment was given to the husband and not a trust power. This literal approach was followed until the 1950s; since then, the judiciary have been more willing to interpret trust documents in such a way as to make the trusts valid rather than void. An object that aims to promote increase of knowledge is not charitable unless combined with teaching or education The research and propaganda merely increases public knowledge in the saving of time and money by the use of the proposed alphabet, there is no element of teaching or education The next type of uncertainty, ascertainability, is where it is impossible to find the beneficiaries, either because they have died, moved or changed names. As a duty, a trustee is to take care as an ordinary prudent man would take if he cared for taking an investment for the benefit of other people for whom he felt morally bound to provide (Re Whiteley (1886) 33 Ch D 347 at 355). The trustees may well take into account that the distribution of income will be more tax-efficient if paid to objects with lower income, and transfers of capital may be more beneficial to those with larger incomes. D did not identify which 5% were to be held on trust (no segregation done) and no There is a requirement that the beneficiaries of a trust, known as the objects, be certain. It is of course not unusual for a settler to retain certain rights to himself, e.g. That, however, does not mean that he can simply fold his hands and ignore it, for normally he must from time to time consider whether or not to exercise the power, and the court may direct him to do this. AB was a professional trustee of two discretionary trusts created by the late parents of D1, a Will Trust for the benefit of their issue, and a Grandchildren 's Trust for the benefit of their grandchildren (i.e. In Year 1, the trustees may distribute the entire income to A. Re Manisty's Settlement Trusts [1974] Ch 17 - Case Summary - lawprof.co From his position of trust, a trustee cannot make a profit, nor must he place himself in a position where his interest and duty conflict. Therefore, Lord Wilberforces criteria represents an important practical qualification of the courts zeal to implement a trust if at all possible, vitiating such an arrangement where a class of persons is so hopelessly wide or capricious that a trustee or a judge would have little hope of fulfilling their obligations without running down the trust fund significantly. But these powers and discretions are of an administrative nature and do not affect the beneficial entitlement of the objects. Once the class is determined as being conceptually certain then the matter of a beneficiarys inclusion is a question of fact, rather than law. Become Premium to read the whole document. The beneficiaries of the trust were a closed class composed of the claimants and Mrs Pearson. trailer This rule is of strict application. 0000009387 00000 n 2427356 VAT 321572722, Registered address: 188 Fleet Street, London, EC4A 2AG. The way of exercise of powers and discretions cannot be impose by the settlor, the beneficiaries, of the court. If this clause is inserted, the objects under the gift over take the property unless the donee of the power validly exercises the power. Trusts 5: creating express trusts Flashcards | Quizlet The distinctive feature of this last type of power is that it cannot be released by the appointor. The evidence suggests that the courts have been willing to take a measured, accommodating approach in such situations. This Act came into force on 6 April 2010. the failure to exercise the power, for example 50,000 is transferred to trustees to distribute the income for a period not exceeding 15 years in favour of such of the relatives of the settlor as the trustees may decide in their absolute discretion. A general power of appointment is one which entitles the donee of the power to appoint in favour of anyone, including himself. The alternative type of express trust that may be created is a fixed trust or a trust with an interest in possession. If you have any question you can ask below or enter what you are looking for! The courts development of case law in the second half of the last century to the present day has been deliberately flexible and accommodating, so that trusts can be enforced in favour of beneficiaries where possible. Trust disputes the trustees perspective in Private Client Business (1998) 3, 127-140, Wilson, S. Textbook on Trusts (10th ed, OUP, 2011), Sarah Wilson, Textbook on Trusts (10th ed, OUP, 2011) 66, Alastair Hudson, Equity and Trusts (7th ed, Routledge, 2013) 199, Leahy v Attorney-General of NSW [1959] AC 457, A. J. Oakley, The Modern Law of Trusts (9th ed, Sweet & Maxwell, 2008) 43, Jill Martin, Modern Equity (18th ed, Sweet & Maxwell, 2009) 107, Alastair Hudson, Understanding Equity and Trusts (4th ed, Routledge, 2013) 44, This is derived from the decision in Re Benjamin [1902] 1 Ch 723, Watt, G. Cases and Materials on Equity & Trusts (8th ed, OUP, 2011) 255, I. M. Hardcastle, Administrative unworkability a reassessment of an abiding problem in Conveyancer and Property Lawyer (1990) Jan/Feb, 24, John Wood, Trust disputes the trustees perspective in Private Client Business (1998) 3, 127. thought fit for 21 years after the death of the last survivor of the settlor's nieces and nephews This is the case if, on the date of the creation of the trust, the settlor has not only identified the beneficiaries under the trust but also quantified the interest vested in each beneficiary. TASK1) A contract is an agreement between two or more parties. Otherwise, trusts would have been failed if there is one individual who cannot be said to be the "given postulant". and not "What did the parties mean to say? Where an individual trustee delegated his power, a restricted power to delegate the functions of trustee by power of attorney during his absence was given by the Trustee Act 1925, s 25. "Evidential uncertainty" is where a question of fact, such as whether a claimant is a beneficiary, cannot be answered; this does not always lead to invalidity. Re Pauling's Settlement Trusts: ChD 1962 - swarb.co.uk By clause 1 of the settlement, the trust fund is defined as meaning the 9initial 100 settled and any additions made to it. The testator transferred property on trust for his two children for life, with remainder to his issue, and declared that if they should die without issue, the survivor should have the power to dispose by will among my nieces and nephews, or their children, either all to one or to as many of them as my surviving child shall think fit. Re hay's settlement & Hunter v Moss - Re hay's settlement trust The trustees were told to hold a - Studocu These notes summarise cases relating to trust and equity law. Second, the trustees may delegate to any beneficiary or beneficiaries of full age and beneficially entitled to an interest in possession in land of their functions which relate to the land. Duties required for a trustee are set out by different jurisdictions which have their own legislation. This is called a mere power of appointment (or bare power, or power collateral). (1) This section applies to an instrument to the extent that it provides for property to be held on trust for charitable purposes. [32] Megaw LJ's stand reflects the current position. In its report, the Law Commission concluded as follows: Sections 13 and 14 of the Perpetuities and Accumulations Act 2009 reflected the opinion of the Law Commission. The judge had found that, having misunderstood the powers of advancement given, the bank was liable to repay . On the other hand, family ties (such as children, siblings, and so on) are rightly identified as conceptually certain because the members can be identified with recourse to a straightforward family tree. shares were all identical. is that of the distinction made between tangible and intangible assets. [6] Many trusts are formed through wills, which create additional issues when determining intention. However, it should be noted that the restrictions in section 164 do not apply to accumulations directed in trusts created by a company as opposed to an individual. Where fixed trusts are concerned, a court should be able to rule with certainty as to who are the intended trustees and beneficiaries. A discretionary trust may be either exhaustive or non-exhaustive. In re Gestetner: ChD 1953 - swarb.co.uk 0000002606 00000 n In Paul v Constance,[7] it was held that the phrase "the money is as much yours as it is mine" was sufficient to translate to a trust. *You can also browse our support articles here >. In order to dispense with the resulting trust, it is customary for the settlor to insert an express gift over in default of appointment in the trust instrument. The flexibility of the complete list test has proved to be very sensible, because it allows the court to make every effort to enforce the trust. Whereas the law on certainty of objects tells us whether or not there are beneficiaries who are ascertainable to a court, the overarching beneficiary principle states as an equitable principle that all trusts require ascertainable beneficiaries. They are not beneficiaries but, like the objects of a discretionary trust, are potential beneficiaries or have a . An alternative gift in the event of a failure to distribute property under a power of appointment. In Re Kayford,[6] Megarry J held that "it is well settled that a trust can be created without using the word "trust" or "confidence" or the like; the question is whether in substance a sufficient intention to create a trust has been manifested". In this case the clause entitling Mr X to a beneficial interest is an express gift over in default of appointment. Re Tuck [1978] Ch 49 - Case Summary - lawprof.co like her grandchildren). W is referred to as a donee of the power and A, B and C as the objects of the power. "Conceptual uncertainty" is where the language is unclear, something which leads to the trust being declared invalid. Info: 2647 words (11 pages) Essay In the case of delegation by trustees as a body a statutory power to employ agents was created by the Trustee Act 1925, s 23, which has now been outdated and replaced by the more comprehensive provisions in the Trustee Act 2000 (TA 2000). In the cast of trust of land, liberal powers of delegation by power of attorney are available. Resulting Trusts Cases | Digestible Notes A distinction was drawn between the primary duties of a trustee where delegation was not possible and the commitment of others to support in the management of a trust fund which was allowed (Speight v Gaunt (1883) 9 App Cas 1 at 29). Establishing Certainty of Objects in Trusts - LawTeacher.net This is not necessarily fatal; the test for deciding if it is or not was laid out by Wynn-Parry J as: "mere difficulty of ascertainment is not of itself fatal to the validity of the gift. Re Hay's Settlement Trusts [1982] 1 WLR 202 by Lawprof Team Key point Affirmed Re Manisty - a power cannot be void for administrative unworkability Facts In a trust deed trustees were directed to hold trust funds for any persons (with the exception of the settlor, her husband and Ts) or purposes they appoint with 21 years of settlement xb```f``:xb a\X^A3VN +3u#yWLI@bW]}@If a (d10)0(A-`0d. On the date of the creation of the trust, each beneficiary has a fixed one-third share of the fund that he may retain or dispose of as he likes. In Re Wynn a judge refused to enforce an arrangement purporting to give the trustees the power to overrule any objection that might be raised by the beneficiaries in a dispute between the two entities. Dishonesty in this situation is not restrained to deceit. The applicable forms of uncertainty have been categorised as: Conceptual uncertainty is the "most fundamental in the validity of a trust or power", and is where the language used in the trust is unclear. [22] Re Tuck's Settlement Trusts EWCA Civ 11 is a leading English trusts law case, concerning the certainty of trusts. He, his wife and his adult son brought a claim against his sister, Mrs Pearson, and her co-executor Mrs Walker, as trustees of a discretionary will trust declared by their mother's will. Do you have a 2:1 degree or higher? trustees, made invalid merely by the width of the power & the number of persons who were There are four categories of uncertainty that can affect the validity of a trust: conceptual uncertainty, evidential uncertainty, ascertainability and administrative unworkability. Level 1 - Cases - Equity & Trusts Law - Memrise 11 years later, the trustees executed a deed of appointment where they appointed the whole [14] According to Byrnes v Kendle, the question that needs to be answered in determining whether a certainty of intention exists is "What is the meaning of what the parties have said?" Stamp LJ had an approach based entirely on the facts, with no greater impact on certainty of objects. The accumulated income is treated as capitalised income or capital in both trust law and tax law. A more recent case is Protheroe v Protheroe [1968] WLR 519 where the husband, a joint owner with his wife of a leasehold property, purchased the freehold reversion; it was held that because he was a trustee the freehold reversion became subject of the trust although the husband was entitled to recoup the expense of the purchase. W is referred to as a donee of the power and A, B and C as the objects of the power. In April 1980 the trustfund consisted of a property in Edinburgh and investments worth over140,000, with an annual income of over 11,000. To provide that an expert can give advice as to who is or is not a beneficiary; to give the trustees power to decide who is or is not a beneficiary; and to allow the trustees to grant property to almost anyone, hoping this will reduce the risk of uncertainty. The combined effect of s 164 of the Law of Property Act 1925 and s 13 of the Perpetuities and Accumulations Act 1964 was that the settlor became entitled to select any one (but only one) of a specified number of periods as the maximum period during which the trustees may accumulate the income.