1. The historical origins of the trust

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter traces the historical roots of the trust. The law of trusts is the offspring of a certain English legal creature known as ‘equity’. Equity arose out of the administrative power of the medieval Chancellor, who was at the time the King’s most powerful minister. The nature of equity’s jurisdiction and its ability to provide remedies unavailable at common law, the relationship between equity and the common law and the ‘fusion’ of law and equity, and equity’s creation of the use, and then the trust, are discussed.

14. Charitable trusts

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter focuses on charitable trusts. Charitable trusts are not subject to the beneficiary principle. These are valid purpose trusts that are enforced, not by beneficiaries, but by the Attorney-General or, more recently, by the Charity Commission. Charities are generally exempt from most taxes. The conditions for charitable status; the charitable character of public purpose trusts; trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; trusts for other purposes beneficial to the community; the law concerning the public benefit requirement; and the application of the cy-près doctrine to save charitable trusts from failure are discussed.

13. The law governing fiduciaries

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter discusses the nature and scope of fiduciary duties. It begins by considering the ‘no conflict’ rule, the basic rule governing fiduciaries. Under the rule, a fiduciary is liable to account for any profit he obtains in circumstances where his interests may conflict with his duty to his principal. It then turns to rules governing authorised profits; unauthorised profits and the liability to account for them; self-dealing and fair dealing rules; the proprietary and personal nature of the liability to account; equitable compensation for breach of fiduciary obligation; and secondary liability for breach of fiduciary obligation.

10. The trust up and running

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter discusses the powers and obligations of trustees, the most important of which are the duty of investment and the powers of maintenance and advancement. The power of maintenance enables a trustee to spend income, but not capital, for the benefit of infant beneficiaries, i.e. those under 18. The power of advancement is the power to expend the capital of the trust fund to benefit a beneficiary who has only a future or contingent interest in it. The discussions also cover the appointment, retirement, and removal of trustees; custodian, nominee, managing, and judicial trustees; and variation of trusts.

6. Formalities and secret trusts

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. The law sometimes imposes a requirement on the form of legal transactions before it will regard those transactions as valid, provable, or enforceable in court, typically a requirement that the transaction be made or recorded in writing. This chapter first discusses the formality that applies when creating a trust, that is, bringing into existence equitable rights. It then turns to the formality for the transfer, assignment, or disposition of already existing equitable interests, that is, the existing rights of beneficiaries under a trust. It considers the specific provisions of the Wills Act 1837 that apply to trusts. In particular, it looks at secret and half-secret trusts—testamentary trusts that fail to comply with the Wills Act.

3. Express trusts: trusts and powers

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter considers express trusts, which are flexible devices for structuring the benefits that property can provide, particularly in ways that are impossible or inconvenient to do simply by making an outright gift. The discussions cover fixed trusts, discretionary trusts, and powers of appointment; duties and powers virtute officii (powers given to office holders), personal powers (powers nominatum), powers ‘in the nature of a trust’, fiduciary powers, bare and mere powers; interests under fixed trust; the principle in Saunders v Vautier; trusts void on grounds of public policy and illegal trusts the rule against perpetuities; the enforcement and judicial control of discretionary trusts and powers of appointment; excessive and fraudulent exercises of powers; interests under discretionary trusts and powers of appointment; locus standi to enforce the trust and beneficiaries’ rights to information, and protective trusts.

9. Trusts and purposes

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter focuses on how the law enables a person to devote their property to the carrying out of purposes, while restricting the ways in which that can be done. The discussions cover the beneficiary principle and the invalidity of private purpose trusts; anomalous valid purpose trusts; the case of powers for purposes; an enforcer principle for the creation of a private purpose trust; valid trusts for persons ‘limited by a purpose’ aka Re Sanderson’s trusts; the bare trust with mandate and Quistclose trusts; gifts to unincorporated associations; the dissolution of unincorporated associations; and the rule against perpetuities.

7. Certainty

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. A declaration of trust must be ‘certain’, meaning that a settlor must declare the terms of the trust with sufficient ‘certainty’ or precision for the trustees to know what they must do, or the intended trust fails. This chapter discusses the ‘three certainties’, following Knight v Knight (1840): certainty of intention; certainty of subject matter; and certainty of objects, in both the traditional family and commercial contexts. The first concerns the question whether what the putative settlor did or said amounts to a declaration of a trust over his property. The second requires that the property that is to form the trust corpus is identifiable. The third requires that the intended beneficiaries, the ‘objects’ of the trust, are identifiable.

4. Constructive trusts

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter focuses on constructive trusts, which are trusts that arise by operation of law. It identifies and discusses three broad categories of constructive trust: firstly, those in which the law anticipates the result of legal title passing at law, with the result that the legal owner is regarded as holding his title on trust for the transferee until the transfer of the legal title is effective; secondly, the ‘trust’ under which a non-bona fide third party recipient of property transferred in breach of trust holds the title to the property he receives; and, finally, those in which individuals acquire for the first time an interest in another’s property because of their past dealings or relationship with the legal owner. Each of these is discussed in turn.

11. Breach of trust

Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter discusses cases involving breach of trust. It first deals with the trustee’s personal liability for breach of trust. A trustee can breach the trust in two basic ways. First, by misapplying the trust property, eg the trustee gives the property away to someone who is not a proper object of the trust. Secondly, the trustee can breach his duty to act with care and skill in the administration of the trust causing the trust loss. Next, it considers the case where a third party dishonestly assists in the breach of trust. This is followed by a discussion of the proprietary claims that the beneficiaries can make against the trustee and strangers to the trust who receive trust property.