Transcript for:
Overview of English Equity and Trusts Law

welcome to this podcast on the English law of equity and trusts we will cover the basic elements of the law as they relate to undergraduate law students and those taking the solicitors qualifying examination the sqe this podcast was prepared by Dr Janis glinavos and is narrated by an AI voice if you would like to know more about how this podcast was produced get in touch with Dr yanis let's get started by presenting the basics of the law of trust Welcome to our discussion on the English law of equity and trusts in this episode we embark on a journey to understand the foundations of trusts and their place in the legal landscape trusts are an integral part of equity and Equity itself forms one of the two primary pillars of English law the other being common law today we will explore Equity Define trusts and compare them to other related legal Concepts providing a strong foundation for understanding this fascinating subject Equity Equity represents a system of law designed to address shortcomings in common law historically common law provided rigid and often inflexible Solutions Equity arose as a complimentary system offering remedies where common law was inadequate before the judicature act of 18737 Courts of equity operated separately from courts of common law each applying its own distinct rules today these systems are fused but Equity remains a vital component of the legal framework with its principles often applied by the charcer division of the high court although primarily associated with trusts Equity also plays a crucial role in other areas of law such as contract and land law for example in land law the doctrine of proprietary asole allows Equity to provide remedies even when formalities for land transactions are not met in contract law Equitable remedies such as specific performance or injunctions go beyond the monetary damages typically awarded by common law conflicts between law and Equity occasionally common law and Equity provide conflicting answers to Legal disputes since as early as 1616 the principal established in the Earl of Oxford's case dictates that Equity prevails in such situations this principle remains enshrined in modern legislation specifically section 49 of the senior courts act 1981 however this precedence does not render common law obsolete Equity was designed to supplement common law addressing its gaps and ensuring Justice in unique circumstances the two systems coexist each is Central to the broader legal framework the fusion debate the merger of the common law and Equity courts raised questions about whether the merger was purely administrative or substantive some argue that the two systems retain their distinct rules despite sharing a single judicial structure this view famously articulated by Ashner Likens equity and common law to two streams of jurisdiction that run parallel without mixing others question whether maintaining these distinctions is necessary or productive cases like Breaky the chedington court State illustrate that courts often exercise both jurisdictions without merging their substantive principles the nature of equity Equity is not synonymous with subjective fairness or Justice while it began as a flexible and discretionary system it evolved into a structured body of rules governed by precedent critics who feared that Equity might buy like the Chancellor's foot a metaphor for inconsistency were reassured by Landmark judgments like GV Pritchard which emphasized predictability and coherence in Equitable decisions however equity's Reliance on Broad principles like unconscionability as sparked debate while some argue that open textured Concepts allow for tailored Solutions others view them as unpredictable notable cases such as Bank of Credit in Commerce International V Arendelle and Pennington V Wayne highlight this tension as you delve deeper into this subject consider how unconscionability shapes Equitable outcomes and whether it enhances or undermines the legal system it Equitable maxims Equity operates under guiding principles often expressed as maxims these include phrases like Equity considers that done with which ought to be done and he who comes into Equity must come with Clean Hands these maxims encapsulate equities ethos but are not enforcable rules they serve as interpretive tools that help courts navigate complex cases for example the maxim Equity will not assist a volunteer reflect equity's reluctance to inforce gratuitous promises without consideration what is a trust a trust is a legal relationship in which one person the trustee holds property for the benefit of another the beneficiary or for a specific purpose trusts can involve personal property such as money or shares or real property such as land they are versatile tools used for various purposes including family wealth management pension schemes and charitable activities the key components of a trust include the settler who creates the trust the trustee who who manages the property and the beneficiary who benefits from the trust the property held in trust is known as the trust property or trust assets importantly trusts can be either Express created intentionally by the settler or implied arising by operation of law why create a trust trusts serve multiple purposes one common reason is to manage property for individuals unable to do so themselves such as miners trusts also provide flexibility allowing assets to be distributed over time or according to specific needs for example a Trust might provide income to a spouse during their lifetime with the remainder passing to Children upon The spouse's Deb trusts also enable the pooling of resources as seen in Pension funds which cons solidate contributions for Collective investment additionally quests in protect assets by ring fencing them shielding them from creditors in cases of bankruptcy however it's important to note that such protections must be established well before financial difficulties arise the juridical effect of a trust when a trust is created it often results in a division of ownership the trustee holds the legal title to the property while the beneficiary holds the Equitable interest some Scholars argue that this divis vision is metaphorical with Equitable rights being impressed onto the legal title rather than carved out of it this nuanced debate underscores the complexity of trust law and its interplay between legal and Equitable principles trusts arising by operation of law not all trusts are intentionally created constructive trusts instance arise in response to unconscionable conduct such as when a fiduciary profits from a breach of Duty resulting trusts on the other hand emerge when property is transferred without clear intent prompting Equity to infer the appropriate outcome these mechanisms ensure that trust principles extend beyond formal declarations addressing situations where fairness demands Equitable intervention comparing trusts to other legal Concepts understanding trusts often involves comparing them to related legal relation ships such as agency contract and debt while these relationships share similarities they remain distinct in critical ways in an agency relationship an agent acts on behalf of a principle trustees however act in their own name for the benefit of others contracts meanwhile are fundamentally consensual agreements whereas trusts can exist independently of mutual consent finally while debts involve straightforward obligations to repay fasts impose complex fiduciary duties on trustees requiring them to act in the best interests of beneficiaries conclusion inequity and trusts represents some of the most dynamic and impactful elements of the English legal system they provide mechanisms for fairness flexibility and precision addressing situations where rigid common law rules might Force thought by understanding these principles tools and their application we gain insight into a system designed to balance the demands of Justice with the realities of modern life thank you for joining me in this discussion stay tuned for our next episode where we'll delve deeper into the specific types of trusts and their unique characteristics types of trusts Welcome to our discussion on the different types of trusts this topic Builds on our previous exploration of trusts by exam mining their classifications and purposes understanding the terminology and distinctions between these types is essential for navigating the complex world of prust law today we'll explore Express trusts discretionary and fixed trusts be trusts trusts arising by operation of Law testamentary and interv trusts and purpose trusts Express trusts the express trust is the most common type of trust it is deliberately created ated by a settler the person who establishes the trust the settler May either declare that they will hold the property on trust for beneficiaries becoming the trustee or transfer the property to another person to hold his trustee this declaration of intent is known as a declaration of trust sometimes legal formalities such as a written instrument are required depending on the nature of the property involved where at trust to valid certain conditions must be met much like the formation of a contract the settler must demonstrate a clear intention to create a trust not merely Express a hope or desire this intention ensures that the trustee is bound by a duty to act according to the trust's terms the principle of freedom of trust allows settlers to divide entitlements under the trust as they choose within the bounds of the law discretionary and fixed crusts thrusts can be categorized as either fixed or discretionary based on the obligations placed on trustees regarding the distribution of property in a fixed trust the distribution is predetermined by the trust instrument leaving no discretion to the trustees for example a Trust might specify that income from an asset be paid equally to all beneficiaries in contrast discretion iary trusts Grant trustees the power to decide how to distribute the property among beneficiaries this flexibility allows trustees to respond to beneficiaries varying circumstances over time for instance a settler May create a trust for their children allowing the trustees to determine how much each child receives based on their needs a trust can also include both fixed and discretionary elements for example the income from shares might be distributed at the trustees discretion while the capital of those shares is divided equally among the beneficiaries when a specific condition is met be trusts a bear trust is a minimal form of trust where the trustee holds property to the order of the beneficiary in this Arrangement the trustee simply acts as a nominee following the beneficiary's instructions regarding the property be trusts are often used in situations where the trustees role is purely administrative such as when Shares are held on behalf of someone else trusts arising by operation of law not all trusts are intentionally created summarized by operation of law I through statutary Provisions or judicial intervention T statutary trusts 33 trusts are imposed by legislation to address specific issues for instance in English land law co-owners of land hold the title on a statutary trust for themselves as provided by the law of property act 1925 while statutary trusts are beyond the scope of this discussion they demonstrate how the law and use trusts to achieve policy objectives constructive trusts a constructive trust arises when the law imposes a trust to address unjust enrichment or breaches of fiduciary duty for example in fhr European Ventures LLP VCA Capital Partners LLC a trust was imposed to recover secret permissions obtained in breach of fiduciary duty constructive trusts can also arise in cases of mistaken payments or when property is transferred under an incomplete contract these trusts can be classified as either institutional or remedial institutional constructive Trust arise automatically based on established legal rules while remedial constructive trusts depend on a Court's discretion English courts had generally been reluctant to recognize remedial constructive trusts favoring the certainty of institutional trusts resulting trusts resulting trusts occur when property jumps back to the settler or their estate due to a lack of clear intent or the failure of an expressed thrust they are divided into two categories presumed resulting trust where property is transferred without consideration and automatic resulting trusts which arise when a trust fails partially or entirely implied trusts the term implied trust is ambiguous and has largely fallen out of use depending on context it can refer to either constructive trusts or Express trusts inferred from the facts modern legal discourse avoids this term to reduce confusion whil testamentary and interv trusts trusts can also be classified based on when they take effect a testamentary trust is created through a will and plumbs into operation after the Settler's death typically the executives of the will act as the initial trustees by contrast an interv trust is established during the Settler's Lifetime and is a common form of expressed trust purpose trusts unlike most trusts which benefit individuals or groups purpose trusts exist to achieve a specific objective however non-charitable purpose trusts are generally invalid because they lack identifiable beneficiaries who can enforce the trust exceptions exist for certain testamentary trusts but these are rare Gable purpose trusts on the other hand are valid and enforcable they are regulated by the charity commission and the Attorney General on behalf of the crown these trusts play a significant role in advancing public benefits such as education poverty relief and healthare conclusion understanding the different types of trusts provides insight into the flexibility and utility of crus law from Express trusts ailed to specific family needs to constructive trust that address breaches of Duty each type serves a unique function within the legal system by recognizing these distinctions we can appreciate the nuanced ways in which trusts are used to manage and protect assets while ensuring Justice and fairness thank you for joining me on this exploration of trust wipes in our next discussion we will delve deeper into the mechanisms that govern trust creation and enforcement stay tuned C creating a trust the three certainties welcome to another episode in our series on trusts today we're tackling an essential concept the three certainties required to create a valid trust to form a trust a settler must demonstrate an intention to create it specify the property that will be held on trust and identify the beneficiaries who will benefit from it the these are known as certainty of intention certainty of subject matter and certainty of objects understanding these certainties is fundamental to trust law and ensures that the trust functions as intended certainty of intention the first certainty focuses on the Settler's intent to create a Thrust courts look for Clear evidence that the settler intended to impose legally binding obligations on the trustee to hold property for the beneficiaries this this evidence can come from spoken or written words or in some cases from conduct to illustrate consider re vandell's trust numbered to D2 where the court emphasized that mere unexpressed intentions are insufficient similarly in Paul V constants a man's repeated statement that money in a bank account was as much yours as mine was held to demonstrate sufficient intention to create a trust however the court Supply an objective test focusing on how a reasonable person would interpret the words or actions in question uncertainty often arises in cases involving gratuitous transfers of property for instance INRI Adams and Kensington vest a testator statement that he left his estate to his wife in full confidence that she would do what was right for their children was deemed insufficient to create a trust the courthous held that these words reflected a moral obligation not a legal one another challenge occurs when the Settler's intention is ambiguous as in Jones V lock here a father handed a check to his infant son saying I give this to baby for himself the court found no intention to create a trust emphasizing the need for clear and binding expressions of intent certainty of subject matter so the second certainty requires the trust property to be clearly identified without this the trust cannot function trust property can be almost anything land money shares or even intangible rights but it must be defined with Precision difficulties arise when the fust property is part of a larger mass for example in Rel London WinCo at fust over bottles of wine failed because the bottles were not segregated making it impossible to identify which which were held on trust in contrast the decision in Hunter V Moss upheld a trust over a proportion of shares even though specific shares were not identified the court reasoned that shares of the same class are fungible and do not require segregation conceptual uncertainty can also invalidate a trust for example in Palma V Simmons a trust for the bulk of the Sea's estate failed because the term bulk was too vague inversely in Ray Go's will trusts a direction to provide a reasonable income was upill as the court could determine what was reasonable it is worth noting that future property or property the settler does not yet own cannot be the subject of a trust for instance a settler cannot create a trust over an inheritance they expect to receive this principle underscores the require that cost property must exist and be identifiable at the time that trust is created certainty of objects the final certainty ensures that the beneficiaries of the trust are sufficiently identified this is crucial because trustees must know whom they owe duties to and who can enforce the trust for fixed trusts the complete list test applies meaning all beneficiaries must be identifiable for example in icv Broadway Cottages trust a trust failed because the beneficiaries could not be completely identified discretionary trusts however use a less stringent test in mcf V Dalton the Court established the any given postulant test which requires trustees to determine whether any given person is or is not a member of the class of beneficiaries conceptual Clarity is essential here as vague terms like friends or to people may render the trust invalid however evidential uncertainty where sufficient evidence is lacking to prove a person's inclusion does not necessarily invalidate a discretionary trust in some cases the courts allow third parties to resolve uncertainties for example in retox settlement trusts the court upheld a provision allowing a third party to determine whether a beneficiary met certain criteria however this approach remains contentious and is not universally accepted administrative workability and capriciousness even if the three certainties are satisfied a trust may still fail if it is administratively unworkable this issue arises when the class of beneficiaries is so large or IL defined that the trustees cannot perform their duties effectively for example a tust for the inhabitant of London might be deemed unworkable due to its vast scope additionally capriciousness where the trusts terms appear arbitrary or a Ral basis can also invalidate a prust as noted in rem manast settlement trusts conclusion the three certainties intention subject matter and objects form the foundation of trust law they ensure that trusts are created with Clarity and precision protecting both trustees and beneficiaries by understanding these principles we gain insight into the mechanisms that make trusts a reliable and effective tool in equity thank you for joining me in this discussion stay tuned for our next episode where we'll explore the beneficiary principle and non-charitable purpose trusts the beneficiary principle and non-charitable purpose trusts Welcome to our exploration of the beneficiary principle and non-charitable purpose trusts a complex yet fascinating aspect of trust law today we'll delve into the general prohibition on private purpose trusts the limited exceptions and the theoretical underpinnings that shape this area of law introduction the beneficiary principle lies at the heart of trust law requiring that every trust except for charitable trusts has identifiable human beneficiaries without such beneficiaries non-charitable purpose trusts are typically void the rationale for this principle is rooted in enforcement a trust without beneficiaries lacks individuals who can hold trustees accountable while charitable trusts rely on oversight by the charity commission or the attorney general non-charitable purpose trusts a unique unque challenges due to their private nature objections to non-charitable purpose trusts several objections underpin the prohibition against non-charitable purpose trusts uncertainty of objects non-charitable purpose trusts often fail due to the absence of identifiable beneficiaries for instance in REI Aster's settlement trusts 1952 a trust for vague purposes like maintaining good understanding between nations was deemed invalid similarly Morris V Bishop of Durham 1805 reinforced the necessity of ass attainable beneficiaries to enforce trust obligations excessive duration the rule against perpetuities prevents trusts from lasting indefinitely trusts that might exceed the legally allowed period are void as seen in McCoy the odonnell 1943 however exceptions exist for specific places such as maset V Bingle 1876 where a trust to erect a monument was upheld despite potential perpetuity concerns lack of beneficiaries the absence of beneficiaries undermines a trust's enforceability in re endicot 1960 the court emphasized that a valid trust requires beneficiaries with Equitable interests however in Reed denley's trust deed 1969 g j suggested that individuals deriving factual benefits from a trust could enforce it creating a notable Divergence in judicial interpretation excessive testamentary delegation purpose trusts risk delegating testamentary power excessively leaving trustees with unchecked discretion however this objection is often secondary to the fundamental issues of uncertainty and lack the beneficiary the beneficiary principle at its core the beneficiary principle asserts that thrusts must either benefit identifiable individuals or qualify as charitable this principle ensures that trusts remains subject to Legal control as articulated in Maurice fire Bishop of Durham 1805 Scholars debate whether the principle represents a rights or enforcer approach the rights perspective holds that beneficiaries must have Equitable rights to enforce the trust while the enforcer perspective suggest that a designated enforcer could suffice even in the absence of Equitable interests some jurisdictions like the Cayman Islands and gery have experimented with public enforces for non-charitable purpose trusts however these approaches remained intenti as they challenged traditional Notions of private rights and obligations valid non-charitable purpose trusts despite the general prohibition English law recognizes limited exceptions often referred to as anomalous trusts these include tombs and monuments reasonable Provisions for maintaining Graves or monuments such as in reeden 1889 are upheld care for specific animals costs for the upkeep of particular animals also seen in reedin are permiss ible within perpetuity limits B of masses trusts for religious masses provided they are not exclusively charitable have been validated as in Bourn Vin 1919 courts manage these trusts of imperfect obligation through mechanisms like the petting order petting doall RC petting ball 1842 allowing residual beneficiaries to enforce the trust if trustees fail to act Reed denley's trust deed and its implications in Reed denley's trust deed 1969 g j upheld a trust for land to be used as a recreation ground for employees arguing that the employees direct benefits gave them standing to enforce it while some commentators view this as a discretionary trust or a trust for persons with a purpose attached others argue it challenges the beneficiary principle itself subsequent cases like rinsky's will trust s 1976 have sought to reconcile red Denley within existing legal Frameworks emphasizing the importance of certainty in beneficiary identification trusts for persons limited by a purpose some trusts like those in ree Anderson's trust 1857 specify purposes to define a beneficiary's interest these are not through purpose trusts as the beneficiaries retain enforceable rights for ex example trusts for a child's educational maintenance allocate funds based on the cost of achieving the stated purpose any surplus typically reverts to the Settler's estate or passes under a gift Over clause conclusion the beneficiary principle remains a Cornerstone of English trust law ensuring enforceability and legal accountability while non-charitable purpose trusts are generally void exceptions like renley and anomalous Trust s illustrate the Law's capacity for flexibility however these exceptions are narrowly defined reflecting a cautious approach to expanding the principle as we conclude this episode consider the creation of trusts and transfer of Interest under trusts formalities creation of trusts and transfer of Interest under trusts welcome to today's discussion on the formalities surrounding the creation of trusts and the transfer of interests under trusts these rules ensure Clarity prevent fraud and provide certainty in trust law will explore Declarations of trust testamentary trusts and the formalities for transferring Equitable interests Declarations of trusts of land when it comes to trusts involving land written evidence lays a crucial role under section 53 1 B of the law property act LP a 1925 Declarations of trust concerning land must be manifested and proved by signed writing this rule which originated with the statute of frauds 1677 is not a condition for creating a trust but an evidential requirement for example an oral Declaration of a land trust is valid without written evidence it cannot be enforced in court gissing V gissing in 1970 power ever there are exceptions to this rule in Ros vul cbed 1897 the court allowed oral evidence to prove a trust preventing the statute from being used to perpetrate fraud this case demonstrates equity's principle that it will not allow statutes to become instruments of fraud despite its logic this reasoning has been debated due to its circularity as it presupposes the existence of a trust a testamentary trusts a testamentary trust is one created through a will and takes effect upon the testator's deaths under Section N9 of the wills act 1837 a valid will must be in writing signed by the testator in the presence of two witnesses who also sign these formalities aim to ensure the testator's intentions are clearly documented and prevent disputes after their death despite these requirements courts have upheld secret trusts that do not comply with the wills act secret trusts operate outside the formal framework of Wills relying on the testator's communication of their wishes to trustees this apparent contradiction raises questions about the relationship between statutary requirements and Equitable principles blood for of interests under thrusts and 53 one C of the LPA 1925 governs the disposition of Equitable interests under trusts it requires dispositions to be in writing signed by the person disposing of the interest or their authorized agent this rule ensures that transactions involving Equitable interests are clear and reduces the risk of fraud the interpretation of disposition is Broad as established in grav V IR 1959 in this case an oral Direction by a beneficiary to trustees to hold their Equitable interest for another party was held invalid until documented in writing other scenarios caught by this rule include assignments of Equitable interests self- Declarations of sub trusts Nelson B Greening syes 2007 and disclaimers of interests re Paradise Motors lied 1968 exceptions to the writing requirement exist particularly where there is no risk of fraud for example in vanderville VC 1966 the House of Lords held that section 531 C did not apply where the Equitable interest ceased to exist as there was no longer a trust to protect the rationale for formalities the formalities outlined in sections 53 go one B and C serve to prevent fraud and provide certainty in crust transactions however these Provisions can also create challenges for instance rigid adherence to formalities and invalidate genuine trusts or dispositions while exceptions May blur the lines of consistency courts must balance the need for certainty with Equitable principles as seen in cases like Ros V Co and gray conclusion formalities in trust law ensure that trusts are created and administered with Clarity and integrity while rules like those in the LPA 1925 and the wills act 1837 aim to prevent fraud equity's role in addressing exceptional circumstances highlights the Law's adaptability as we continue to examine trust law we'll see how these principles interact with evolving societ societal and legal contexts thank you for joining me in this discussion stay tuned for our next episode where we'll explore the constitution of trusts the constitution of trusts welcome to today's exploration of the Constitution of trusts an essential aspect of trust law this topic addresses our trust becomes fully constituted the implications of defected Constitution and the rare situ ations where Equity might step in to address imperfections by the end of this discussion we'll have a clearer understanding of how property is transferred to trustees and the principles guiding these processes what does it mean to constitute a trust the constitution of a trust involves transferring property to the intended trustees ensuring that the trust is fully operational and enforcable once constituted trustees hold legal title to the trust property and beneficiaries can enforce the trusts terms importantly a completely constituted trust cannot be revoked by the settler even if the beneficiaries gave no value in exchange self-declared trusts where the settler is also the trustee do not require a transfer of property for other trusts the process of transferring property varies depending on the type of asset involved land transfer requires registration with the land registry under the land registration act 2002 battles property is transferred through physical delivery or execution of a deed shares private company shares require registration in the company's share register choses in action these such as debts require written assignment under Section 136 of the law of property act 192 5 when these formalities are followed the trust is considered fully constituted allowing beneficiaries to enforce it the defective Constitution if a trust is not properly constituted Equity generally adheres to the principle that Equity will not assist a volunteer is Maxim established in Milroy the Fe Lord 1862 means that courts will not intervene to perfect an imperfect prust War gift an imperfect attempt to transfer property to a fuste will not be reinterpreted as a self- declaration of trust as confirmed in Richard's F Delridge 1874 however Equity recognizes exceptions where the general rule is too rigid courts have identified specific scenarios in which they will step in detrimental Reliance if aoni relies on an imperfect gift to their detriment courts May enforce it under the doctrine of proprietary estoo for example in dwin the luin 1862 a son who relied on a promise of land and built a house on it was awarded the land the rule in Rose 1952 this rule applies when a donor has done everything in their power to transfer property but external formalities remain incomplete in such cases the the donor is considered a constructive trustee until the transfer is finalized the rule in strong B bird 1874 if a donor intends to make a gift and later appoints the intended Donny as their executive the gift is perfected upon the donor's death this rule has been extended to various forms of property as seen in re Stewart 1908 the role in R rallies will trusts 1964 even where there is no continuing intention to give the receipt of property by an executive they constitute a promised trust this case blurs the lines of intention and Constitution donatio mortis Cara a gift made in contemplation of death conditional upon the donor's death may be upheld without satisfying typical formalities in senv Headley 1991 the delivery of Eed with deed box containing the title to property was sufficient to validate the gift unconscionability in Pennington V Wayne 2002 the court of appeal held that Equity could perfect an imperfect gift if it would be unconscionable for the donor to retract their intention this controversial decision departs significantly from traditional principles examining key cases C landmark cases illustrate these principles Milroy V Lord 1862 established the general rule that Equity will not perfect imperfect gifts or TS BR Rose 1952 demonstrated the importance of a donor doing everything within their power to transfer property Pennington V Wayne 2002 introduced the concept of unconscionability expanding equity's role in imperfect gifts te Choice from V pagarani 2001 highlighted how a Settler's words and actions could be interpreted generously to find a trust where formalities were incomplete the role of equity equity's interventions in defective Constitution reflect its focus on fairness and Justice however these exceptions challenge the traditional Maxim that Equity will not assist volunteers critics argue that Concepts like unconscionability lack Clarity and predictability potentially undermining the consistency of trust law conclusion the constitution of trusts involves precise formalities to ensure Clarity and enforceability while the general rule prohibits courts from assisting with imperfect thrusts or gifts equity's exceptions demonstrate its capacity to adapt to individual circumstances by balancing formal requirements with Equitable principles courts strive to uphold Justice without eroding the foundational rules of thrust law it thank you for joining me in this discussion stay tuned for our next episode where we'll delve into promises to create trusts promises to create trusts welcome to today's discussion where we will explore the nuances of promises to create trusts this topic examines when promises become enforceable who can enforce them and the legal mechanisms involved by the end will understand the principles governing promises in Deeds promises given for consideration and those arising from detrimental Reliance rapid introduction promises to create trusts often begin as mere intentions but not all are enforcable in English law equity and comma law both maintain that a bare promise is insufficient however there are three exceptions where such promises can gain legal recognition promises made in Deeds also called Covenant promises supported by consideration promises detrimentally relied upon as seen in cases of proprietary estole each of these exceptions has distinct rules and implications which we will now explore in detail promises in Deeds a promise contained in a deed known as a covenant can be enforced by parties to the deed for instance in Canon V Harley 1949 A Father's Promise in a deed to pay his daughter any inheritance exceeding £1,000 was enforceable law importantly Equity does not enforce such promises unless supported by consideration or enforcement by beneficiaries watch beneficiaries who are not party to a deed face significant challenges however three scenarios might allow them to enforce the promise gory inclusion the contracts rights of third parties act 1999 potentially enables third parties to enforce covenants provided they satisfy spory criteria however it is uncertain whether the ACT applies to voluntary covenants marriage consideration in historical marriage settlements children or grandchildren were considered within the marriage consideration and could enforce promises Equity treated these promises as constructive trusts but this practice is now rare Trust of the right to sue trustees who are priorties to a covenant can sue for breach if the trust of the Covenant argument holds beses must exercise their rights on behalf of the beneficiaries however this approach is controversial and limited to present not future property Rec Cooks settlement trusts 1965 enforcement by trustees trustees being parties to the Covenant can sue at law however Equity sometimes prevents them from doing so as seen in R price 1917 courts reasoned that enforcing a covenant on behalf of a volunteer would indirectly achieve what Equity denies outright this principle was up up filled in subsequent cases such as R 1939 and rook's settlement trusts 1965 promises for consideration promises supported by consideration are treated as contracts if a settler promises to establish a trust in exchange for consideration the promise becomes enforceable at law or Equity however the issue of privity arises if the intended beneficiary is not a party to the agreement while the contracts rights of third parties act 1999 May provide relief it remains unclear whether voluntary covenants qualify as contracts under the ACT promises and detrimental Reliance Equity May enforce a promise whether the promise has relied on it to their detriment even without consideration this principle rooted in proprietary estole requires the promisee to demonstrate reasonable Reliance and resulting detriment in re Basham 1986 a plaintiff who cared for her stepfather in Reliance on his promise to leave her property successfully tamed the estate detrimental Reliance does not guarantee the Fulfillment of the promise courts may choose alternative remedies based on fairness as in Jennings V rice 2002 and guest V guest 2022 critique of judicial reasoning cases like re price have sparked academic debate critics argue that trust's inability to enforce governance undermines beneficiaries rights others suggest that denying enforcement aligns with equity's refusal to assist volunteers this tension illustrates the balance courts must strike between enforcing promises and maintaining Equitable principles conclusion promises to create trusts highlight the interplay between common law and Equity while rigid rules often limit enforcement exceptions for Deeds consideration and detrimental Reliance demonstrate equity's adaptability understanding these principles is crucial and navigating the complexities of trust law thank you for joining me in our next episode we'll explore charitable purpose trusts charitable purpose trusts welcome to today's discussion where we'll explore the fascinating world of charitable purpose trusts these unique trusts form a critical part of equity and Trust law offering special advantages while addressing complex legal questions about their validity public benefit and administration today we'll cover the meaning of charitable purposes the public benefit requirement and the challenges posed by non-charitable elements and the C bre Doctrine introduction charitable purpose trusts are distinct because they exist to promote specific purposes rather than benefit individuals to be valid these trusts must meet several legal criteria the most critical being that their purpose is charitable charitable status grants numerous benefits including exemptions from the beneficiary principle the perpetuity Rule and certain tax obligations the primary governing statutes are the Charities act 2011 and more recently the Charities act 2022 at their core charitable trusts must exclusively serve charitable purposes mixed purposes where non-charitable elements are included can invalidate the trust courts have been tasked with interpreting what constitutes a charitable purpose and addressing the public benefit requirement these tasks often raise difficult questions particularly in borderline cases the meaning of charitable purposes the definition of charity has evolved over centuries historically the preamble to the statute of charitable uses 16001 provided the foundation in income tax Commissioners the pemsel 1891 Lord mcnut categorized charitable purposes into four heads the relief of poverty the advancement of Education the advancement of religion and other purposes beneficial to the Community the Charities act 2011 expanded these categories to include 13 specific heads of Charity such as the advancement of Health amateur Sport and Environmental Protection courts rely on this statutary framework while drawing on case law to determine whether a purpose is charitable for example rusts for the relief of poverty do not require recipients to be destitute but must address genuine Financial harm ship raris brick in 1951 meanwhile trusts for education or religion are interpreted broadly encompassing a variety of activities such as Artistic Endeavors or promoting ethical beliefs however charitable purposes must provide tangible benefits the Charities act 2011 section 4 explicitly states that no presumption of benefit exists every trust must positively demonstrate its public benefit in National anti-v section Society VC 1947 the court weighed the benefits of suppressing Viv section against its detriments to medical research emphasizing the importance of balancing competing considerations the public benefit requirement public benefit is a Cornerstone of charitable trusts to qualify a trust must benefit the public or a sufficient bro section of it this requirement prevents private arrangements from masquerading as Charities exceptions exist particularly for trusts relieving poverty where the personal nexus's rule does not apply in Dingle V Turner 1972 a trust benefiting employees of a company was upheld because it relieved poverty even though it was limited to a specific group by contrast in oppenheim V tobacco securi trust Cola Ed 1951 a trust for the education of employees children failed due to the personal Nexus test the public benefit requirement also demands that charitable trusts not exclude the poor bech charging schools and hospitals for instance must ensure accessibility for those unable to pay the Independent Schools Council the charity commission 2011 clarified that mechanisms such as scholarships can satisfy this requirement contaminating non-charitable elements charitable trusts must be exclusively charitable non-charitable elements such as political purposes and contaminate and invalidate the thrust in mcgaven b a 1982 a trust supporting amnesty International's campaigns was deemed non-charitable because it sought changes in the law while promoting human rights is charitable under the Charities act 2011 the line between permissible ible advocacy and political campaigning remains blurred courts May interpret ambiguous trust terms generously to preserve charitable status in Guild VC 1992 seemingly non-charitable elements were construed as ancillary ensuring the trust's validity in some cases non-charitable and charitable purposes can can be severed allowing the charitable part to continue Salis Bri versus Denton 18 19 57 the Cypress Doctrine the Cypress Doctrine addresses situations where a charitable trust's purpose becomes impossible or impractical to achieve derived from the French term as near as possible the doctrine allows courts to redirect trust funds to similar purposes preserving the Settler's charitable intent initial failure occurs when a charitable purpose cannot take effect from the outset in such cases a court must determine whether the settler intended a general charitable purpose if so C pre and apply re fingers W 1972 subsequent failure where a purpose becomes impractical after taking effect automatically invokes C press the Charities act 2011 section 62 provides statutory guidance for applying the doctrine granting courts flexibility to adapt to changing circumstances conclusion charitable purpose trusts exemplify equity's adaptability and its commitment to public benefit they enjoy unique privileges but face stringent requirements to ensure their integrity by balancing statutary provisions and judicial interpretation courts continue to refine this vital area of trust law thank you for joining me in this discussion stay tuned for our next episode where we'll delve into unincorporated associations unincorporated associations their legal complexities and trusts Welcome to our latest discussion in the equity and trusts Series today we'll unravel the intricacies of unincorporated associations groups that lack legal personality yet manage to hold property and organize activities these associations from student societies to local sports clubs create fascinating challenges for the law particularly regarding how they hold and distribute property introduction unincorporated associations are groups formed by individuals to achieve a shared purpose unlike Incorporated bodies such as companies they lack legal personality meaning they cannot hold property in their own name yet donations and transfers to the associations continue to occur requiring the courts to interpret and enforce these Arrangements typically the challenges associated with unincorporated associations arise in two key areas the construction of gifts and transfers made to the association the distribution of property when the association dissolves through judicial creativity and legal doctrines courts have sought to address these issues sometimes with surprising results transfers to unincorporated associations transfers of property to an unincorporated association and takes several forms each raising unique questions let's explore the primary approaches the courts have taken a transfer to members the simplest interpretation of a transfer to an unincorporated association is that it is a transfer to the members as Crow owners each member receives an equal share of the property which they can use as they wish however this approach often undermines the donor's intentions for example a donation to a student Law Society intended to fund events might instead be divided among its members for personal use shy a purpose trust another approach interprets the transfer as creating a trust for the purposes of the association in this case the property cannot be distributed among members but must be used exclusively for the association's stated purposes unfortunately this interpretation often fails because most purpose trusts are non-charitable and thus invalid under English law Lei V A for New South Wales 1959 some extens such as those established in red denley's trust deed 1969 apply when a trust benefits identify viable individuals the contract holding Theory a more modern approach the contract holding Theory resolves many of these issues it recognizes that members of unincorporated associations are bound by mutual agreements or rules transfers to the association are treated as contributions to a collective fund el by officers or trustees in accordance with the association's rules this approach avoids the pitfalls of purpose trusts as the obligations are contractual rather than fiduciary rare rushes WT 1972 rinsky WT 1976 under the contract holding Theory two variants exist be trust contractual mandate solution property is held on be trust by officers for all members equally but the association's rules dictate its use this allows members to achieve the association's purposes without breaching trust law purely contractual approach property is owned jointly by members as co-owners with the association's rules governing its use however this is less pral for large associations the distribution of property upon dissolution when an unincorporated association dissolves the distribution of its remaining property depends on how the property was originally held courts have used varying methods to address this issue resulting trusts in older cases courts treated property as held on resulting trust for the contributors this assumes that contributions were made for specific purposes which fail upon dissolution however this approach is problematic because it implies invalid non-charitable purpose trusts cont contract holding Theory modern courts favor the contract holding Theory under this model property held for members under the associations rules is distributed among the existing members upon dissolution for example in rebok constabulary widows and orans fund friendly Society nums two 1979 property was divided equally among members when the association dissolved bonania in rare cases es property may pass to the crown as bone of a antia if the association's rules and contributions cannot identify ownership kak V Edwards 1896 however this approach is rarely favored in modern law conclusion unincorporated associations exemplify the challenges of balancing legal formality with practical governance through the development of doctrines like the contact holding Theory courts have provided workable solutions to issues of property holding and distribution however the intersection of tust Law and unincorporated associations remains a dynamic and evolving area of equity thank you for joining me in this discussion in our next episode we'll delve into resulting trusts resulting trusts their nature and education welcome to today's episode where we explore the fascinating concept of resulting trusts resulting trusts are unique because they emerge from the circumstances of property transfer often jumping back to the original owner or settler we'll unpack their definition the situations in which they arise and the theoretical debates that surround them by the end of this discussion you'll have a deeper understanding of this crucial area of equity and Trust law what are resulting trusts the term resulting comes from the lap in resel meaning to jump though nothing physically jumps back in a resulting trust instead this concept signifies that property is held by a transferee on trust for the transferer when certain legal or factual circumstances exist resulting trusts address situations where the transfer's intention is unclear or the trust's purpose has failed broadly speaking there are two categories of resulting trusts presume resulting trusts prts these arise when the law presumes in the absence of contrary evidence that the transferor did not intend to gift the property to the transfery automatic resulting trusts Arts these occur by operation of law when an expressed trust fails regardless of intention we'll delve into the distinctions between these categories and their implications shortly when do resulting trusts arise resulting trusts arise in three main scenarios voluntary conveyances when property is gratuitously transferred to another person the law presumes that the recipient holds it on trust for the transferer unless the evidence suggests otherwise this is the essence of a presumed resulting trust for example in di V di 1788 the court held that contributions to the purchase price of property resulted in a trust for the contributor exceptions include presumption of advancement certain relationships such as those between parent and child assume the transfer is a gift budgetary Provisions section 63 of the law of property act 1925 modifies these presumptions in some land related transfers no purchase money resulting trusts these arise when one person contributes to the purchase price of property held in another's name unless the presumption is rebutted the contributing party retains an equitable interest proportional to their contribution cases like the Venture 1908 demonstrate this principle failed trusts when an Express trust fails due to vagueness illegality or lack of beneficiary an automatic resulting trust arises the property reverts to the settler as seen in Maurice b Bishop of Durham 1804 why do resulting trusts arise the question of why resulting trusts arise Sparks considerable debate Scholars and judges offer competing theories retention Theory Advocates argue that resulting trusts reflect the transfer's retention of Equitable interest in vanderville BC 1966 Lord Wilberforce supported this view suggesting that Equitable interest is retained unless explicitly transferred with absence of intention Theory others like Lord Millet in Air Jamaica bur charlon 1999 argue that resulting trusts respond to a lack of intention to benefit the transferee this perspective shifts Focus From the transferor's retention to the transferees absence of beneficial entitlement common intention Theory Lord Brown Wilkinson in West Deutch Landers Bank beers Islington LBD 1996 viewed resulting trusts as fulfilling the presumed intentions of the parties this approach emphasizes shared expectations rebutting presumptions presumptions underlying resulting trusts are rebuttable evidence showing the transfer's intention to gift or loan property negates the trust for example in folks V Pasco 1875 the court founded a transfer to a survic grandchild was a gift based on contextual evidence quis trusts a special case quiz Clos trusts occupy a unique position within resulting trusts they arise when funds are transferred for a specific purpose if the purpose fails the funds revert to the transferer as seen in Barkley's Bank V Quist close Investments 1970 these trusts ensure that the transferee holds funds on trust for the transferer unless the intended purpose is fulfilled conclusion resulting trusts demonstrate equity's adaptability in addressing ambiguous or failed transactions whether presumed or automatic they ensure fairness by redirecting property to its rightful owner or resolving unintended outcomes however the debates surrounding their theoretical basis highlight the complexity and evolution of this area of law thank you for joining me in this exploration of resulting trusts in our next episode we'll examine constructive trusts and their unique role in addressing unconscionable conduct and unjust enrichment constructive trusts their role and application welcome to today's episode where we delve into destructive trusts a fascinating area of trust law that deals with situations where Equity imposes a trust to address fairness or prevent unjust outcomes unlike expressed trusts which are deliberately created constructive trusts arise by operation of law today we'll explore clear and disputed examples examine their types and analyze the reasoning behind their imposition introduction instructive trusts arise not from a Settler's intention but from circumstances where Equity deems it necessary to address wrongdoing unjust enrichment or other legal issues they serve as a remedy ensuring that property is held fairly in situations where strict legal ownership may lead to unjust outcomes as we'll see constructive trusts operate in diverse contexts from fiduciary breaches to mistaken payments clear examples of constructive trusts certain situations provide wellestablished examples of constructive trusts is vendor purchaser situations when a contract to sell land is formed Equity regards the vendor as holding the title on trust for the purchaser this principle established in lart V Edwards 1876 reflects equity's Maxim that Equity treats has done that which ought to be done perfecting imperfect gifts in r r 1952 a trust was imposed when a donor completed all necessary steps to transfer shares even though formal registration was pending Equity recognized the recipient beneficial interest despite the incomplete transfer fiduciary breaches a fiduciary who profits from their position holds those gains on trust for the principal in fhr European Ventures LLP VCA Capital part Partners LLC 2014 secret commissions received by a fiduciary were held on constructive trust by the principal mistaken payments in Chase manutan Bank the Israel British Bank 1981 funds mistakenly paid were held on trust for the payer although the reasoning in this case has been criticized it highlights equity's intervention to prevent unjust enrichment disputed examples of construction Ive trusts not all instances labeled as constructive trusts are universally accepted liability to account courts sometimes Describe third parties involved in trust breaches as constructive trustees even though they hold no property in Dubai aluminium Co lettered V Salam 2003 Lord minut questioned the appropriateness of this terminology suggesting these individuals are merely liable to account in Equity secret trusts secret trusts where property is left for purposes communicated informally to trustees have sparkk debate over whether they should be classified as constructive or Express trusts types of constructive trusts constructive trusts are categorized as either institutional or remedial institutional constructive trusts these arise automatically based on a established rules independent of judicial discretion for example trusts in fiduciary breaches or vendor purchases situations fall into this category courts simply declare their existence remedial constructive trusts these Arise at a Court's discretion to achieve fairness in specific cases although recognized in jurisdictions like the United States English law has consistently rejected them as seen in poek international V nadir 1992 and angov PT listed V Bailey 2016 critics argue that remedial trusts undermine certainty and predictability in property law the basis for constructive trusts understanding why constructive trusts arise involves analyzing equity's response to different situations wrongs constructive trusts often respond to wrongdoing such as breaches of fiduciary duty in KV Sanford 1726 a trustees unauthorized profit was held on trust for the beneficiary reinforcing the principle that fiduciaries must avoid conflicts of interest unjust enrichment Equity intervenes to prevent recipients from being unjustly enriched for instance mistaken payments as in Chase Man Bon Bank may give rise to constructive trusts to ensure restitution other events constructive trusts can also arise in unique context such as Mutual Wills or donio mortis Cora where Equity enforces fairness based on informal agreements or last minute gifts criticisms and challenges constructive trusts have faced criticism for their Reliance on open-ended Concepts like unconscionability ICS argue that such terms lead to unpredictability and arbitrary decisions the distinction between institutional and remedial trusts though theoretically clear than blur and practice cases like Pennington V Wayne 2002 highlight equities struggle to balance fairness with legal certainty conclusion constructive trusts illustrate equity's adaptability in addressing diverse legal and moral issues whether responding to wrongdoing just enrichment or other circumstances they ensure that property is held and used fairly however their theoretical foundations and practical applications continue to provoke debate reflecting equity's Dynamic role in modern law thank you for joining me in this discussion in our next episode we'll explore secret trusts and their inate relationship with the principles of oy secret trusts their nature and legal complexity welcome to today's discussion where we delve into the Intriguing world of secret trusts these are a fascinating anomaly in trust law operating outside the formal requirements typically imposed by legislation will explore what secret trusts are why they exist the justifications for their recognition and the complexities they introduce into equity and testamentary law by the end of this episode you'll gain a clearer understanding of their function and relevance what are secret trusts secret trusts are testamentary trusts that deviate from the formalities required by the wills act 1837 there are two primary types fully secret trusts these arise when a will appears to leave property to a legy absolutely but the legy is secretly agreed to hold the property on trust for a third party the existence of the trust is not mentioned in the will half secret trusts these occur when the will acknowledges that the legy is to hold the property on trust but does not disclose the beneficiaries or purposes of the trust for example a will might state £10,000 to John on trust for purposes I have communicated to him secret trusts allow testators to circumvent the public nature of Wills avoiding scrutiny while providing flexibility to change Arrangements without for formally amending their Wills justifications for secret trusts secret trusts raise significant legal questions because they bypass the statutary formalities of the wills act 1837 two primary theories justify their recognition the fraud Theory this theory asserts that secret trusts revent fraud if a legate who agreed to act as a trustee later denies the arrangement they would unjustly enrich themselves Equity intervenes to enforce the trust ensuring the testator's wishes are honored however this rationale faces criticism for its circular reasoning and struggles to explain half secret trusts where fraud is less apparent the deor outside the will Theory advocated in cases like Blackwell V Blackwell 1929 this Theory suggests that secret trusts are rise independently of the will the obligation is created when the trustee accepts their role rendering the Will's act irrelevant while this approach avoids the fraud rational limitations it raises questions about the reliability of informal evidence and blurs the line between trusts and wills phase requirements for a valid secret trust for a secret trust to be enforcable certain conditions must be met communication the testator must communicate the terms of the trust to the trustee for fully secret trusts this can occur at any time before the testator's death in half secret trusts the communication must occur before or at the time of the Will's execution as emphasized in re Keen 1937 acceptance the trustee must accept their role either explicitly or through acquiescence without acceptance no trust arises as seen in re boy 1884 certainty of terms the trust's terms must be sufficiently clear ambiguity can render the trust invalid leaving the property to pass under the terms of the will or via intestacy challenges and controversies secret trusts introduce several legal complexities timing of communication fully secret trusts allow flexibility while half secret trusts require stricter timing this distinction is controversial with critics questioning its logical basis contradictions in the will if the will contradicts the alleged trust courts prioritize the Will's terms as in Reen consistency is critical to maintaining the Integrity of testamentary documents multiple trustees when there are multiple trustees only those informed of the trust are bound unless the property is held as joint tenants and communication occurred before the Will's execution restad 1900 predes of parties if the secret beneficiary predes the test data the gift typically lapses however re Gardner number 2 1923 controversially held that the beneficiaries estate could inherit freting the trusters inter vivor rather than test witnessing by beneficiaries or trustees under section 15 of the Will's act a beneficiary who witnesses the will can not benefit from it courts have extended this principle to secret beneficiaries but allowed exceptions as in R young 1951 are secret trusts Express or constructive secret trusts verfication remains debated some some view them as expressed trusts created by the testator's Declaration While others consider them constructive arising from the trustees acceptance the distinction has practical implications particularly for trusts involving land where written evidence is required under section 53 1 B of the law of property act 1925 constructive trusts are exempt from this requirement potentially offering a broader scope for enforcement conclusion secret trusts highlight equity's ability to adapt and uphold fairness even when staty formalities are bypassed however they also challenge the principles underpinning testamentary law raising questions about evidence reliability fraud prevention and the balance between stary rules and Equitable principles thank you for joining me in this exploration of secret trusts in our next episode we'll examine the appointing reti reing and removing trustees appointment retirement and removal of Trustees welcome to today's episode where we focus on the critical roles of appointing retiring and removing trustees within the realm of trust law trustees are the backbone of any trust ensuring its proper Administration and adherence to its terms but what happens when trustees can no longer serve or when new trustees need to be added let's explore the legal Frameworks and practical considerations that govern these processes introduction trustees are essential for carrying out a trusts terms that circumstances often require changes in the trustee ship a trustee may become incapacitated unfit or simply unwilling to continue serving alternatively a trust may require additional Trust es to enhance decision making or to comply with legal requirements the powers to appoint retire or remove trustees can come from the trust instrument itself statutary Provisions or the Court's inherent jurisdiction each of these mechanisms comes with specific rules and considerations the appointment of Trustees initial appointment for interv trusts the initial trustees are usually named in the trust instrument in the case of a self- Declaration of trust the settler is often the first trustee testamentary trusts created through a will frequently name executiv as the first trustees however issues arise when nominated trustees refuse the role or are deceased in such cases hours to appoint initial trustees may fall to others such as surviving trustees or personal Representatives new appointments there are three primary occasions for appointing new trustees death or incapacity when a trustee dies or a Trust Company becomes insolvent Replacements are necessary retirement or removal trustees who retire or are removed must be replaced to maintain the trust's functionality expanding the trustee body adding trustees can improve trust management or comply with statutory requirements such as having two Trustees for land and trusts to facilitate overreaching statutary Powers such as those under section 36 of the trusty act 1925 often govern these appointments these Provisions allow surviving or continuing trustees to appoint Replacements or additional trustees retirement and removal of Trustees retirement trustees have a right to retire but their retirement is often contingent on appointing a replacement to avoid disrupting the trust for example section 39 of the trustee act 1925 allows a trustee to retire if a deed is executed and a replacement trustee is appointed this ensures the trust remains properly administered removal a trustee may be removed if they are unfit incapable or otherwise unable to fulfill their duties removal can occur through statutory Powers section 36 one of the trustee act 1925 allows for the removal of a trustee under specific conditions such as incapacity or prolonged absence Court intervention the court can remove a trustee under its inherent jurisdiction when their conduct threatens the trust's proper Administration the welfare of the beneficiaries is the Court's primary consideration as highlighted in letter thebr 1884 powers under the trust instrument many trust instruments include Provisions for appointing retiring or removing trustees these powers are typically granted to the current trustees the settler or other specified individuals however such Provisions can UNC problematic if poorly drafted or if the designated individuals are deceased or incapacitated statutory Powers often serve as a fallback in these situations statutory Provisions trustee act 1925 sections 36 and 39 of the trustee act 1925 provide a general framework for replacing or discharging trustees these Provisions address scenarios such as appointing new trustees Upon A trustees Deb or incapacity allowing a retiring trustee to appoint a replacement removing trustees who are unfit or incapable of serving thrusts of land and appointment of fres act 1996 section 19 of this act empowers beneficiaries of full age and sound mind who are absolutely entitle to the trust property to direct the retirement or appointment of Trustees this partially overturns the decision in re Brock Bank 1948 which denied beneficiaries the ability to Direct Buy changes the Court's role when statutory or trust instrument powers are insufficient the court and St in under Section 41 of the trustee act 1925 the court May appoint new trustees if it is expedient and inexpedient to do so without judicial intervention I Additionally the Court's inherent jurisdiction allows it to remove trustees when their actions jeopardize the trust's proper execution prioritizing the beneficiar welfare besting trust property a critical aspect of trustee changes is the transfer of thrust property when trustees are appointed they must acquire legal title to the trust assets similarly retiring or remove Trust Tres must relinquish title section 40 of the trustee act 1925 facilitates this process by allowing Deeds of appointment or retirement to vest property in the new trustees however some upsets such as land or company shares may require separate formalities conclusion the appointment retirement and removal of Trustees ensure the smooth functioning of trusts where the three statutary Powers trust instruments or Court intervention these processes balance flexibility with the need for continuity and proper Administration by understanding these mechanisms we gain insight into the dynamic interplay between trust laws legal Frameworks andal realities thank you for joining me in our next episode we'll explore Express trust relationships the express trust relationship duties powers and beneficiaries welcome to today's episode where we explore the intricacies of Express trusts a Cornerstone of equity and Trust law express trusts are intentionally created to manage property for specific beneficiaries or purposes today we'll examine the rights and duties within an Express trust delve into trustees powers and responsibilities and discuss the rights of beneficiaries including their ability to enforce the trust and access information introduction Express trusts are a sophisticated legal concept that generate both personal and proprietary rights personal rights are enforcable against specific individuals like the trustee while proprietary rights bind third parties who come into contact with trust property this combination of Rights makes expressed trusts versatile and protective ensuring the Settler's intentions are Feld and beneficiaries as interests safeguarded rights and duties in an Express trust the trust relationship involves a delicate balance of Duties owed by trustees and rights held by beneficiaries Trustees of fiduciary responsibilities including keeping proper trust accounts Distributing property as per the trusts terms investing trust bonds prudently failure to fulfill these duties can result in personal liability for trustees beneficiaries on the other hand possess rights that can bind third parties if trust property is improperly transferred these include enforcement rights beneficiaries can hold trustees accountable for breaches of thrust rights against strangers third parties who receive trust property in breach of trust may be required to return it unless they are both unified purchases for Value without notice trustees powers and duties trustees powers are classified as fiduciary or personal fiduciary Powers such as investing trust property must always be exercised in the beneficiary's best interests personal Powers by contrast allow holders to act for their own benefit e duties duty of care trustees must act with the skill and care of a prudent person the trustee act 2000 codifies this Duty requiring trustees to consider professional expertise and the specific needs of the trust duty to act even edly frostees must balance the interests of income and capital beneficiaries fairly duty to avoid conflicts of interest the juares must not use position for personal gain dispositive and administrative powers dispositive powers concern the distribution of trust property such as appointing beneficiaries or advancing funds administrative powers include managing Investments ensuring property and delegating tasks to agents these powers are crucial for the efficient administration of the trust beneficiaries rights and Powers beneficiaries hold significant rights that allow them to enforce the trust and ensure its proper Administration these include right to be informed beneficiaries must be informed of their interests under the trust access to information beneficiaries are entitled to trust accounts and documents but not necessarily to records explaining trustees discretionary decisions Rel lundon der settlement 1965 right to collapse the trust under the principle in Saunders Bier 1841 adult beneficiaries with full mental capacity and an absolute interest in terminate the trust and demand the transfer of property investment and delegation trustees investment Powers were governed by the trusty act 2000 which grants broad discretion but imposes strict duties prudent invest M trustees must ensure Investments preserve Capital value and generate reasonable returns diversification Investments should be Diversified to manage risk ethical considerations while trustees must prioritize Financial returns ethical Investments may be permissible if they do not compromise beneficiaries interests Howen V Scargill 1985 delegation is another key aspect of trustee powers costes can delegate administrative functions but remain accountable for the agent's actions statutory Provisions such as section 25 of the rusty act 1925 allow temporary delegation under strict conditions enforcement and accountability beneficiaries are the ultimate enforcers of a trust they B through Trustees for breaches of trust hold the third parties liable for knowingly assisting or receiving trust property in breach of trust enforce Equitable remedies such as following and tracing misappropriated property these enforcement mechanisms ensure trustees adhere to their duties and Safeguard the trust Integrity conclusion the express trust relationship is a dynamic interplay of Rights duties and Powers by understanding these elements we appreciate how equity ensures fairness and protects the interests of all parties involved whether it's enforcing fiduciary duties or balancing beneficiaries rights Express trusts remain a Cornerstone of legal Innovation thank you for joining me in our next episode we'll explore breach of trust breach of trust trustees and third parties welcome to today's episode where we examine breaches of trust an essential Topic in equity and Trust law trusts are built on the foundation of fiduciary responsibility but when trustees fail in their duties or third parties interfere serious consequences can arise in this episode we'll explore trustee liability remedies available to beneficiaries and the responsibilities of third parties implicated in reach of trust introduction a breach of trust occurs when a trustee violates the terms of the trust or General legal principles governing trusteeship this might involve failing to distribute income or Capital to beneficiaries making unauthorized Investments or improperly transferring trust property the liability for such breaches is primarily personal meaning trustees may be required to restore trust losses out of their own Pockets however third parties can also be held accountable if they knowingly assist in or benefit from a breach trustee liability for breach of trust personal and proprietary rights beneficiaries can assert personal and propriatary rights against trustees who breach the trust personal liability requires trustees to pay compensation for losses caused by their breach proprietary claims allow beneficiaries to recover specific trust property or its traceable proceeds from the truste or third parties falsifying and sarging Trust accounts one primary way beneficiaries enforce accountability is through trust accounts falsifying the account if trustees make unauthorized payments beneficiaries can ask the court to falsify the account by declaring the transaction invalid trustees must either reverse the transaction or compensate the trust for any resulting loss sarging the account when trustees fail to take proper air such as by neglecting to invest trust funds or ensure trust property beneficiaries can request the court to searge the account this requires trustees to make up for the trust's diminished value two strict liability and defenses in most cases trustee liability for breach of trust is strict trustees are responsible regardless of their intent negligence or honesty however certain defenses May apply beneficiary consent a fully informed and competent beneficiary's consent can excuse a breach exemption Clauses trust instruments may include Clauses limiting trustee liability though these cannot Shield trustees from acts of dishonesty or recklessness Armitage fars nurse 1997 relief under Section 61 of the trustee act 1925 courts May Rel Trustees of liability if they acted honestly reasonably and fairly liability of third parties trustees dis unau a person who assumes control of trust property without being formally appointed as a truste is deemed a trustee to son taught such individuals are held to the same standards as properly appointed trustees and are liable for any preaches they commit dishonest assistant third parties who assist in a breach of trust can be personally liable if their actions are dishonest the dishonesty test combines subjective knowledge with an objective standard of morality as clarified in Royal brunai Airlines Ean 1995 knowing receipt third parties who receive trust property in breach of trust may also be held liable to succeed in a claim of knowing receipt beneficiary must prove the recipient knew the property was transferred in breach and dealt with it for personal benefit liability here has both proprietary and personal Dimensions remedies and Equitable compensation hold remedies for breaches of trust aim to restore the trust to the position it would have been in if the breach had not occurred this may involve reversing unauthorized transactions returning misappropriated property or providing monetary compensation the concept of Equitable compensation ensures beneficiaries are made whole even in cases where tracing specific property is not possible conclusion breaches of trust highlight the critical responsibilities of trustees and the potential liabilities faced by Third Parties by enforcing strict accountability Equity ensures trust relationships are upheld and beneficiaries is right are protected however evolving principles such as the tests for dishonesty and causation continue to shape this Dynamic area of law thank you for joining me in our next episode we'll explore fiduciary duties and their role in Equitable remedies breach of fiduciary duty duties and remedies welcome to today's episode where we delve into fiduciary duties and the implications of their breach fiduciary duties l at the heart of trust law and other areas of equity safeguarding the interests of principles against potential misuse by fiduciaries in this discussion we'll explore what fiduciary duties entail key rules like the no conflict and no profit principles and remedies available when these Duties are breached introduction to fiduciary relationships a fiduciary is an individual usted to act or on behalf of another in a relationship of trust and confidence trustees are the paradigmatic for series but the concept extends to company directors agents solicitors and others who exercise discretion for their principles the essence of a fiduciary relationship is the fiduciary's duty to prioritize the principal's interests avoiding conflicts and improper benefits distinguishing breach of fiduciary duty from breach of trust a breach of trust occurs when trustees violate the terms of the trust or general trustee duties such as unauthorized Investments reaches of fiduciary duty however involve actions where fiduciaries Place their interests above those of their principles or misuse their positions for personal gain for example investing trust funds in a company where the truste has personal interests constitutes a breach of fiduciary duty under the no conflict rule the rules governing fiduciary duties the no conflict rule fiduciaries must avoid situations where their personal interests conflict with their duties this rule applies even if the conflict does not result in actual harm to the principal for instance in bardman V fips 1966 a solicitor acting for trustees profited from purchasing shares Al though the profits benefited the trust the Court held the solicitor accountable under the no conflicts rule the no profit rule fiduciaries are prohibited from retaining unauthorized profits derived from their positions for example in Williams v Barton in 1927 a trustee earned a commission by introducing trust business to a brokerage the court required the trustee to surrender the commission reinforcing that the juice series cannot exploit their roles for financial gain the self-dealing rule when fiduciaries transact with their principles such as buying trust property the self-dealing rule applies unless beneficiaries give fully informed consent SL transactions are voidable regardless of fairness exceptions are rare and must be justified by unique circumstances as seen in holder V holder 1968 the fair dealing rule this rule addresses situations where fiduciaries purchase beneficiary's interests in the trust to avoid liability fiduciaries must demonstrate they acted transparently disclosed all relevant information and offered Fair terms in re Thompson settlement 1986 the burden of proving fairness lay squarely on the fiduciary remedies for breach of fiduciary duty precision and reversal courts May resin transactions resulting from breaches of fiduciary duty restoring the parties to their original positions if recision is impossible Equitable compensation or discouragement of profits May apply amount of profits the juares must account for unauthorized gains derived from their breaches in fhr European Ventures llpv Ceda Capital partners LLC 2014 the Supreme Court failed that profits made by a fiduciary from a bribe were held on constructive trust for the principal allow beneficiaries to trace the funds Equitable compensation if breaches result in financial loss courts award Equitable compensation to restore the principal's position unlike common law damages Equitable compensation focuses on actual losses caused by the breach considering hindsight and fairness nocturn fee Lord ash Burton 1914 trusty exemption Clauses Frost instruments often include exemption Clauses to limit trustees liability however these Clauses cannot Shield trustees from liability for dishonesty or recklessness as held in Armitage far nurse 1997 the scope of such Clauses in fiduciary breaches remains uncertain as Illustrated ated in Barnsley V Noble 2016 where trustees relied on an exemption Clause to escape liability for self-dealing conclusion fiduciary duties underscore the importance of loyalty and integrity in relationships of trust breaches of these duties trigger strict accountability ensuring fiduciaries act in their principles best interests as we navigate evolving fiduciary relationships courts can continue to refine these principles balancing fairness with robust protections for principles thank you for joining me in our next episode we'll explore the doctrine of tracing tracing in trusts a deep dive into recovery processes welcome to today's episode where we focus on tracing a vital process within trust law tracing allows beneficiaries to follow or track the movement of trust property that has been misappropriated this concept underpins both proprietary and personal claims ensuring that trust property or its value can be recovered even when it has passed through multiple hands or being converted into other forms in this discussion we'll explore the principles of tracing examine key rules and address some of the controversies surrounding this fascinating area of law introduction to tracing tracing is a process used to identify the proceed of trust property that have been transferred or exchanged it enables beneficiaries to claim the value of their property in its new form or from its current holder this process becomes essential when property is no longer in its original form having been sold exchanged or mixed with other assets the starting point in tracing is distinguishing it from similar processes following flacking property in its original form as it moves from one person to another pricing identifying property that has been exchanged or converted into another form claiming asserting rights over the property that has been followed or traced for example if trust money is used to buy a car tracing allows beneficiaries to claim the car as the proceeds of the trust property common law and Equitable tracing tracing can occur under both common law and Equity but the two systems differ significantly common law tracing under common law tracing applies to property where the claim and retains legal title however common law tracing cannot follow property through mixtures or changes in form the foundational case at Taylor V pluma 1815 illustrates these limitations this rigidity often leads claimants to rely on Equitable tracing which offers greater flexibility Equitable tracing Equitable tracing is available to beneficiaries of a thust and other parties in fiduciary relationships unlike common law Equity allows tracing through mixtures provided a fiduciary relationship exists the case of redlock and 1948 confirmed that fiduciary relationships enable claimant to use Equitable tracing rules even in complex scenarios e rules of tracing tracing rules vary depending on the circumstances and parties involved tracing through mixtures when trust property is mixed with other funds Equity uses specific rules to determine ownership Mar ballots estate 1880 presumes that a wrongdoer spends their own money first leaving trust money Inta reway 1903 allows beneficiaries to claim specific assets Pur Ed with trust money if the remaining funds are dissipated lowest intermediate balance rule limits recovery to the lowest balance in a mixed account as established in James Rosco Bolton LED bar Winder 19115 backwards tring backwards tracing permits claimants to trace trust money used to repay loans or debts incurred before the property was purchased while traditionally disallowed in English law Bishop's gate Investment Management LED V homman 1995 the privy council's decision in federal republic of Brazil be jant International core 2015 recognized backwards tracing in cases with a close causal link between the debt and Trust property to proprietary and personal claims tracing supports two types of claims proprietary claims benefici iies can assert ownership of traceable proceeds such as claiming a car purchased with trust money if the property's value has increased this claim ensures beneficiaries benefit from the rise in value personal claims personal claims arise against wrongdoers or third parties who knowingly deal with trust property for instance someone who knowingly receives misappropriated funds and be held liable under a personal clim subg fabrication is another remedy available through bracing it occurs when trust money is used to discarge a secured debt such as a morgage beneficiaries are subreg to the rights of the Creditor gaining the right to recover the property the case of BCA and the Baja 1995 exemplifies this principle where trust money was used to pay off a mortgage enabling beneficiaries to claim the security challenges and controversies tracing is not without its challenges disputes often arise over the application of rules like the lowest intermediate balance or the validity of backwards tracing Additionally the questions about fairness and competing claims and complicate recovery efforts these challenges highlight the delicate balance courts must strike between Equitable principles and practical realities conclusion tracing is an indispensable tool in equity ensuring that trust property can be recovered and misappropriated assets restored by combining rigorous rules with flexible applications it protects beneficiaries interests while addressing complex Financial transactions however as Financial practices evolve so too must tracing rules ensuring they remain fit for purpose in a modern legal landscape thank you for listening to this podcast have a look around Dr janis's channel for more key sqf LK podcasts