- Created by: azdw
- Created on: 16-03-16 12:01
- An express trust can be either private or public.
- Private trusts are created for the benefit of private individuals or classes of individuals.
- Public trusts are trusts which will benefit members of the public.
Fixed Express Trusts
- In a fixed trust, the beneficiaries and their interests under the trust are clearly specified.
- For example, ‘to my two children Luke and Katie I create a trust of £20,000 in equal parts’.
- They each have £10,000 held on trust.
Discretionary Express Trusts
- In a discretionary trust, the property is held on trust by the trustee who has some discretion (choice) over who, within the specified class is to benefit, what their share of the trust property will be, or both.
- For example, ‘a trust of £20,000 to my two children, Luke and Katie, as the trustee shall decide’, would be a discretionary trust in which there is a discretion as to the share of the property.
- Under this trust, neither Luke nor Katie has anything more than an expectation in the trust; only when the trustee exercises that discretion will they have a clear interest.
- However, as this is a trust, the children can require the trustee to exercise that discretion.
- An example of a trust in which there is a discretion to choose who is to benefit would be, ‘£20,000 to be held on trust for such of my nieces and nephews whom my trustee selects’. The beneficiaries are identified as being part of a class who may benefit.
- Bare trusts are when property is left on trust and the trustee has no discretion or contingencies.
- The trustee’s only duty is to hold the property for the beneficiary.
- The beneficiary of a bare trust will be a sole beneficiary who is sui juris: adult and of mental capability. A simple example is a stockbroker who holds the shares on behalf of another.
- Protective trusts are trusts aimed at preventing an irresponsible beneficiary from wasting trust property.
- Section 33 Trustee Act 1925 simplifies the method by which the beneficiary is given a life interest which is determinable (can be forfeited) on given events, for example bankruptcy or sale.
- At this point the protective trust ends and the property is then held on a discretionary trust for the beneficiary, his or her spouse, and children, or those who would inherit had the beneficiary died.
- There are three broad types of implied trusts: resulting, constructive, and statutory
- In certain circumstances statutory provisions impose a trust.
- For example, a trust for land is created under the Trust of Land and Appointment of Trustees Act 1996 where joint owners hold the legal title on trust for themselves.
- Another area of statutory implied trusts is in dealing with intestate estates – when a person dies without leaving a valid will.
- The Administration of Estates Act 1925 provides for settlement of the estate to family members on the assumed intention of the deceased.
- The deceased person’s personal representative will be appointed by the courts; they are called administrators, not executors.
Arise either when:
• there has been a failure to validly create a trust, ie it is a failed formalities trust: Vandervell v IRC . This situation has been called an automatic resulting trust because it happens regardless of the intention of the settlor. Indeed, inVandervell v IRC a resulting trust arose contrary to the express intention of the settlor to give away property; or
• property is voluntarily transferred to another or purchased (either wholly or partly) in the name of another: Tinsley v Milligan . This category is based on the presumed intention of the resulting beneficiary. Lord Browne-Wilkinson said in Westdeutsche Landesbank Girozentrale v Islington LBC  that resulting trusts were based on the intention of the parties.
Constructive trusts are based on the presumed intention of the parties. This intention is found by the courts in a variety of situations, increasingly where they feel that it would be unconscionable for a person to deny that another has an interest in theproperty.
Breach of a fiduciary duty
Keech v Sandford (1726): the special relationship as trustee between the claimant and respondent meant that any benefit was held for the claimant
Attorney-General for Hong Kong v Reid : where the receipt of bribes which arose from a position of responsibility was found to be held on constructive trust for the state
Receipt ofpropertybelonging to another
El Ajou v Dollar Land Holdings : when property is transferred to another without consideration then it was held that the recipient holds the property on constructive trust for the real owner
Re Sigsworth (1935): receipt by killing
Grant v Edwards : where the home is held in the name of one party where the other contributes to the home on the express/implied understanding that they have an interest in the home