EXPLAIN THE THREE CONDITIONS OF A TRUST DEED WHICH PROVIDE CERTAINITY FOR EXECUTION.

EXPLAIN THE THREE CONDITIONS OF A TRUST DEED WHICH PROVIDE CERTAINITY FOR EXECUTION.

In law  a trust is an arrangement whereby a person (a trustee) holds property as its nominal owner for the good of one or more beneficiaries.

The three conditions include as below;

certainty of intention: settlor's or testator's intent to trust

certainty of subject matter: trust property & respective interests of beneficiaries

certainty of objects: sufficient identification of beneficiaries

Certainty of intention

trust only exists if owner of property intended to create

settlor must have mental capacity to create trust

trust made by under 18 yr old voidable before or within reasonable time of person reaching 18

explicit use of word trust not necessary if words impose duty on person to hold property for benefit of another

Adams & Kensington Vestry (1884) 27 Ch D 394

Facts: testator left all property to his wife for her absolute use & in full confidence that she will do what is right as to the disposal... between my children

Issue: absolute gift or trust in favor of children?

Held: wife took absolutely, no trust intended court considers whole will to construe meaning of words

Certainty of subject matter

certainty of property essential for trusts & valid gifts

trust property must be identified in declaration of trust

settlor's attempts to create trusts over an unquantified part of property will fail

London Wine Company (Shippers) Ltd [1986] PCC 121

Facts: Ps paid for wine but left it stored with D, D became insolvent

Ps argued that D held wine on trust (to claim trust property ahead of other creditors)

Issue: was wine held on trust?

Held: no trust as subject matter uncertain: individual Ps wine had not been separated from entire wine stock certainty

Certainty of beneficiaries (objects)

trustees (Ts) are under an enforceable duty to deal with trust property as directed by the settlor

beneficiary principle: beneficiaries can enforce trust through court action to make Ts carry out duties

beneficiary principle requires certainty of who is beneficiaries

charitable trusts are main exception to rule & are enforced by Attorney General

settlor must identify beneficiaries (objects) clearly when declaring the trust: degree of certainty varies depending on nature of trust

if objects are uncertain: attempted trust uncertain, Ts hold trust property on resulting trust for settlor, if settlor died resulting trust for beneficiaries entitled to residuary estate under will (next of kin on intestacy)

Normally named objects are sufficiently certain

Re Jackson [1933] Ch 237

Facts: testatrix left legacy to my nephew, Arthur Murphy, she had three nephews called Arthur Murphy

Issue: was there sufficient certainty of object?

Held: evidence accepted showing she had contact with one but not others & she intended to benefit him