Case: Re Hay's Settlement Trusts [1981] 3 All ER 786 appointees might be ascertained in the future. thought fit for 21 years after the death of the last survivor of the settlor's nieces and nephews If you are the original writer of this essay and no longer wish to have your work published on LawTeacher.net then please: Our academic writing and marking services can help you! [24] If there are any potential beneficiaries who the trustees are not certain of, or the trustees cannot compile a complete list, the trust is void for uncertainty.[25]. The decision avoided the ridiculous prospect that such potential beneficiaries could prostrate themselves before a court emphasising their attachment to the settlor in order to enrich themselves. Before the expiry of the lease he applied to the lessor for a renewal for the benefit of the child. Disclaimer: This essay has been written by a law student and not by our expert law writers. [23] Fixed trusts are trusts for a specific, named list of individuals, with Alastair Hudson giving the example of "10,000 to be held upon trust equally for the complete team of 11 Sunderland Football Club players who started the 1992 Cup Final at Wembley". Prior to its abolition, the period of accumulation was determined by reference to a number of statutory provisions. Take a look at some weird laws from around the world! Become Premium to read the whole document. This essay will argue that, nevertheless, the separate tests deployed by the courts to establish certainty of objects in both fixed and discretionary trusts has functioned well in recent decades, promoting fair and equitable outcomes where possible. in the nieces and nephews living at the date of settlement all along, o If the original power of appointment was valid, the discretionary trust created by the [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?" objects of the power, However, by requiring the trustees to hold the trust fund for 'such persons' as they should The testators children died without issue and without any appointment having been made by the survivor. _ ,v Section 14 of the Perpetuities and Accumulations Act 2009: There are not only a mere trust and a mere power, but there is also known to this court a power, which the party to whom it is given, is entrusted and required to execute; and with regard to that species of power the court considers it as partaking so much of the nature and qualities of a trust, that if the person who has that duty imposed on him does not discharge it, the court will, to a certain extent, discharge the duty in his room and place.. [42] The final device is to give the trustees the power to give trust property to "anyone in the world" or to "anyone whom the trustees consider appropriate". That was a case where the trustee took advantage of an opportunity to acquire property with which the trust was associated. With regard to charitable trusts, the Law Commissions recommendation for a modification of the accumulation period was enacted in s 14 of the Perpetuities and Accumulations Act 2009. In Re Hays Settlement Trusts [1982] 1 WLR 202 at 210, Megarry V-C laid down three further duties which he regarded not necessary as exhaustive but containing the essentials. The weight of such an argument will vary with the facts of each case. Calouste Gulbenkian, a wealthy Armenian oil businessman, made a settlement in 1929 that said the trustees should "in their absolute discretion" while his son Nubar Gulbenkian was still alive, give trust property to: " Nubar Sarkis Gulbenkian and any wife and his children or remoter issue for the time being in existence whether minors or . Where fixed trusts are concerned, a court should be able to rule with certainty as to who are the intended trustees and beneficiaries. shares were all identical. 0000001627 00000 n In the event of the trustees failing to distribute any part of the income to the relatives, Mr X will be entitled to the same. "Conceptual uncertainty" is where the language is unclear, something which leads to the trust being declared invalid. the settlement became entitled to the trust fund on the expiration of the 21 years, o If both the power and deed of appointment were valid so that the trustees continued to 0000006061 00000 n 2427356 VAT 321572722, Registered address: 188 Fleet Street, London, EC4A 2AG. Since the 1950s, the courts have been more willing to conclude that there was intention to create a trust, rather than hold that the trust is void. It was considered to be in the interest of the public that charitable income, including accumulated income, be distributed within a short period of time. Duties and powers of a trustee are listed according to the proper law by which the trust is governed. years after the death of the last surviving niece or nephew, Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, Public law (Mark Elliot and Robert Thomas), Introductory Econometrics for Finance (Chris Brooks), Principles of Anatomy and Physiology (Gerard J. Tortora; Bryan H. Derrickson), Commercial Law (Eric Baskind; Greg Osborne; Lee Roach), Criminal Law (Robert Wilson; Peter Wolstenholme Young), Marketing Metrics (Phillip E. Pfeifer; David J. Reibstein; Paul W. Farris; Neil T. Bendle), Rang & Dale's Pharmacology (Humphrey P. Rang; James M. Ritter; Rod J. The shares owing to absent beneficiaries may be paid into an escrow account in lieu of their claim or, failing that, conclusive proof of their entitlement under the trust. There was, therefore, an irrational irregularity between the limited power in the Trustee Act 1925 and the broad power in the Enduring Powers of Attorney Act 1985. A non-exhaustive discretionary trust is one where the trustees are given a discretion as to whether or not to distribute the property (either income or capital). In Year 1, the trustees may distribute the entire income to A. Further, a so-called Benjamin Order will permit trustees to distribute the trust property to the known beneficiaries pending the emergence of any absent beneficiaries, provided that the former will undertake to compensate the latter parri passu according to their appropriate share in the event of their reappearance. The settlor may authorise another or others to distribute property to a class of objects but without imposing an obligation to distribute the same. The starting point is the duty of trustees to exercise their powers in the best interests of the present and future beneficiaries of the trust, holding the scales impartially between different classes of beneficiaries. It was pointed out in Chapter 3 that a mere power of appointment may be personal or fiduciary. These shares were not individually identified, but Dillon LJ held that this was irrelevant because the shares were all of the same type and in the same company, and so it made no difference which particular shares were transferred. In re Gestetner: ChD 1953 - swarb.co.uk %%EOF 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. This was refused, so the trustee himself took a lease for his personal benefit. 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. The question of certainty of objects may occur in the context of either a fixed or a discretionary trust. 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. "Certainty of intention" means that it must be clear that the donor or testator wishes to create a trust; this is not dependent on any particular language used, and a trust can be created without the word "trust" being used, or even the donor knowing he is creating a trust. For example, S may transfer property by will to his widow, W, for life with remainder to such of his children A, B and C, as W may appoint by will. The nineteenth century case of Knight v Knight famously provides that, in order to be valid, a private express trust must demonstrate the so-called three certainties only then will a court recognise the trust as binding in equity, and so enforce its terms in order to provide for a beneficiary. In tax law this type of trust is known as a trust without an interest in possession. The test for determining this differs depending on the type of trust; it can be that all beneficiaries must be individually identified, or that the trustees must be able to say with certainty, if a claimant comes before them, whether he is or is not a beneficiary. In this example, a discretionary trust is created in respect of both income and capital. I must keep in mind the distinction between uncertainty as to the events prescribed by the testatorin which the conditionis to operate (which is generally speaking fatal to the validity of such a condition) and difficulty in ascertaining whether those eventshave happened or not, which is not necessarily fatal to such a validity. This is determined by reference to the intention of the settlor. It was irrelevant that the appointors under the deed of appointment were the same persons as No limit on period which income might be accumulated was imposed at common law, other than the general perpetuity period which limited the life of the trust itself. Project Log book - Mandatory coursework counting towards final module grade and classification. The absence of an express gift over in default of appointment is nothing more than an argument that the settlor did not intend to create a trust. Do you have a 2:1 degree or higher? In the case of settled land the duty is imposed on the life tenant as well as the trustees. *You can also browse our support articles here >. One of the criticisms directed towards Hunter A trustee acts dishonestly if he pursues a particular course of action, either knowing that it is contrary to the interests of the beneficiaries or being recklessly indifferently whether it is contrary to their interests or not (Armitage v Nurse [1998] Ch 241). In the management of the trust, if a trustee fails to exercise reasonable skill and care, he will be held to have acted in breach of trust and to be liable for the consequences of that breach. The exception to this rule is found in Hunter v Moss,[19] which concerned 50 shares meant to be transferred to an employee out of a total holding of 950. This has been well explained in the case of Re Butlins Sttlement Trusts [1976] Ch 251, in which there was a claim for rectification where the settlors intention to provide for the trustees to conduct the trust by majority which had not been efficiently carried into the basis that she had not known of the settlors intention so to provide, but giving no other reasoned objection to the rectification. void for uncertainty, Because an hybrid power of appointment (given to a trustee to appoint to anyone in the In Year 2, the trustees may distribute the income and a portion of the capital to B and in Year 3 the income may be distributed equally to A, B and C and the entire capital distributed to C. The instrument setting out the terms of an express trust. because the subject matter was potentially different, while all of Mosss I appreciate the point taken that the subject matter is a part of a homogeneous mass so that specific identity is of as little as importance as it is, for instance, in the case of money. Mrs Oughtred obtained the ownership in equity by virtue of the agreement, and this view has been supported by later cases (see Re Hay's Settlement Trusts [1982]).