Constitution of Trusts Flashcards
Three mechanisms of property transfers (Milroy v Lord 1862)
- Gift
- Transfer on trust
- Declaration of self as trustee
What is needed for a trust to be fully constituted?
Legal title must be in the hands of the trustees, while beneficial interest must lie with another
Maxims relevant to constitution of trusts
- Equity will not perfect an imperfect gift
- Equity will not assist a volunteer
In which circumstances will equity intervene?
- The rule in Re Rose
- The rule in Strong v Bird
- Donatio mortis causa
The rule in Re Rose
The transfer will be effective in equity if the settlor has done everything which was necessary to be done by him in order to transfer the property
Milroy v Lord 1862
Not sufficient for the rule in Re Rose to work if transfer is in incorrect form
Re Fry 1946
Not sufficient for the rule in Re Rose to work if settlor’s further input needed
Mascall v Mascall 1984
F: Completed transfer form to transfer land to son, gave form to a son to apply to Registry, then changed mind
I: Was the gift complete?
H: Yes - rule in Re Rose applies once all steps within settlor’s power complete
Choithram v Paragani 2001
F: P declared would give his wealth to a foundation but died before that happened
I: Was there a transfer?
H: Declaration meant P intended to give to Ts on trusts of foundation deed - equity will not strive officiously to defeat a gift
Pennington v Waine 2002
F: A intended to transfer 400 shares to H, completed transfer form and gave to P who put it on his file, P told H shares transferred and so nothing else he needed to do, H became a director, A died
I: Was there a transfer:
H: Yes, even though A didn’t do anything that she could’ve done - equity will not insist donor has completed all the necessary steps if it would be unconscionable for donor to recall the gift
What was Pennington v Waine later explained with?
Proprietary estoppel - although detriment to H not clear, Cultis v Pulbrook
What is the current position regarding Re Rose?
It seems that equity is to intervene where settlor has not done all that needed to do, but when it’s unconscionable to change mind
The rule in Strong v Bird
If there is intention to give and the intended donee obtains legal title through another capacity, then this will perfect the gift
Strong v Bird 1874
F: B owed money to his mother in law at the time of her death, then appointed executor of her estate
I: What about his debt?
H: B’s debt released when appointed executor
What is necessary for the rule in Strong v Bird to work?
- Legal title must vest in the intended donee (can be fortuitous)
- Property must be capable of enduring the death of donor
- Must be continuing intention to give
