Equity & Trusts

Part A -

Q1: The imposition of a fixed list test for the certainty of objects test for both fixed trusts and discretionary trusts is the only way to impose an adequate level of certainty. Do you agree with this statement?

Q2: It is only the lack of the element of worship that prevents Scientology from being recognised as a religion for charitable purposes. Do you agree with this statement?

Q3: The beneficiary should be permitted to compel the trustee to enforce a contract to settle property upon a trust. Do you agree with this statement?

Q4: The following situations have occurred and you are required to advise the parties in each case what the formality requirements are and if they have met these requirements, and hence what will happen to the property.

A: Peter has left money on trust to provide £10,000 per year for each of Donald and David. David has taken the first annual payment but he now wishes to disclaim the trust. Donald has never taken any such payment and he also wishes to disclaim the trust.

B: Sharon is holding money on trust for Petra. From this Petra receives an income of £10,000 per annum. Petra has decided that she will hold half of this money on discretionary trust for Linda.

C: David is the beneficiary of a trust of which the subject matter is 100,000 shares in Salford Corp. Stephen has a beneficial interest in 50,000 shares in Manchester Corp.  David and Stephen have orally agreed that David will sell his beneficial interest in his shares to Stephen for £50,000 plus the shares in Manchester Corp.

D: Tracy is the trustee of two trusts which are being held for Carol. Carol has indicated that her beneficial interest in the first trust worth £10,000 should be transferred to Yvonne. In addition Carol has stated that in relation to the second trust which is worth £50,000 that both the legal interest of the trustee and Carol's equitable interest should be transferred to Alison.

Q5: The following factual situations have taken place and you are required to advise if a valid secret or half secret trust has been created in each of these situations and hence what will happen to the property.

A: David wants to create  a fully secret trust of £100,000 in favour of Claire.  In his will David left £100,000 to Barbara and Andrea. He informed Andrea that this money was to be held on trust for Claire.

B: Charles agreed with Fred that he would hold £50,000 on secret trust for Hilda. Jack also agreed with Charles that he would hold any stipulated amount on secret trust for Ingrid. In his will Charles left £50,000 to Fred and £100,000 to Jack. He then executed a codicil leaving £75,000 to Fred and £150,000 to Jack.

C: Harry wishes to create a half secret trust and a fully secret trust. The half secret trust of £50,000 is to be held by George for Linda and the fully secret trust of £100,000 is to be held by Stephen for Kevin.  In relation to both the half secret trust and the fully secret trust Harry informed the secret trustees after the will was made. In response to this George expressly agreed to act as a secret trustee whilst Stephen remained silent.

D: Peter wanted to create a half secret trust and a fully secret trust. In relation to the fully secret trust Peter informed Timothy that he would receive £100,000 in a will. Sometime after Peter died Timothy found a letter stating that he was to hold the property on trust for Cassandra. In relation to the half secret trust Peter had a will drafted that stated £50,000 was to be held on trust by Timothy, and sometime after Peter died Timothy discovered a letter stating that he was to hold the £50,000 on trust for Henrietta.

Q6: You have been asked to advise if the following private purpose trusts are valid.

A: Geoffrey is old and frail and nearing the end of his life. He has left £100,000 on trust to create a useful memorial to his late wife Gertrude and for the memorial to be maintained. Geoffrey has also left £50,000 on trust to create a magnificent statue to himself and to maintain it for as long as the law shall allow.

B: Lester has given £200,000 on trust for the creation of a sports facility for the use of employees, ex-employees of Salford Corp and the relations of both of the categories.

C: Annabelle has left £25,000 for the maintenance of Sid her giant tortoise and his offspring. If the money was not use for the maintenance of Sid then it should go to Peter her residuary legatee.

D: Harry created an annual gift of £1000 if the Manchester Animal Hospital maintained his grave. If The Manchester Animal Hospital either failed to maintain the grave or chose not to do so then the gift would be transferred to the Salford Dog Hospital.