Question 1

Certainty of object focuses on the actual property that the settlor wishes to leave on trust.

Accepted Answer

Certainty of object focuses on clearly identifying the beneficiaries or the purposes of the trust, not the property itself.

Question 2

Which two things are necessary before an express private trust is created?

Accepted Answer

Before an express private trust can be created, two essential elements must be established:

1. **Certainty of Intention**: There must be a clear and unequivocal intention by the settlor (the person who creates the trust) to create a trust. This intention can be demonstrated through the language used in the trust document or the deed of trust. The settlor must intend to impose enforceable duties on the trustee to manage the trust property for the benefit of the beneficiaries. The terms of the trust must be precise enough for the courts to enforce them. If the intention to create a trust is vague or ambiguous, the trust may fail for lack of certainty.

2. **Certainty of Subject Matter**: The trust property, also known as the trust corpus or trust res, must be clearly identified. There must be a clear definition of what assets are part of the trust and the extent of the beneficiaries' interest in those assets. This means that the assets must be described with enough precision that they can be identified and separated from the settlor's other assets. Additionally, the rights that the beneficiaries have in relation to the assets must be clear. If the subject matter is not certain, the trust may fail because there is nothing for the trustees to manage or for the beneficiaries to benefit from.

In addition to these two elements, there is often a third requirement:

3. **Certainty of Objects**: The beneficiaries of the trust, or the objects, must be clearly identified or at least be identifiable. The beneficiaries can be individuals, a class of people, or even organizations. If the beneficiaries cannot be determined, then the trust may fail because the trustees would not know to whom they should distribute the trust's assets.

These three "certainties" are fundamental for the creation of an express private trust under common law principles. Without these elements, a trust may not be considered valid, and the assets may revert to the settlor or their estate.

Question 3

In which case was the need for the three certainties in order to establish a trust set out by Lord Langdale?

Accepted Answer

The need for the three certainties in order to establish a trust was set out by Lord Langdale in the case of "Knight v Knight" in 1840. In this case, Lord Langdale MR articulated the principle that for a trust to be valid, it must satisfy three certainties:

1. Certainty of intention: There must be a clear intention by the settlor to create a trust. This means that the settlor must have intended to impose a binding obligation on the trustee to deal with the property for the benefit of the beneficiaries.

2. Certainty of subject matter: The trust property must be clearly identified. There must be a clear understanding of what assets are part of the trust and the extent of the beneficiaries' interest in those assets.

3. Certainty of objects: The beneficiaries of the trust must be clearly identified or at least be identifiable. This means that it must be possible to determine who is entitled to benefit from the trust.

These three certainties are fundamental requirements for the creation of a valid trust, and they ensure that there is a clear and enforceable duty on the part of the trustee to manage the trust property in favor of the beneficiaries. If any of these certainties are lacking, the trust may fail, and the property will be held on resulting trust for the settlor or their estate.

Question 4

What was the principle set out in Paul v Constance (1977) 1 WLR 527?

Accepted Answer

The answer of What was the principle set out in...

Question 5

What was held in Sprange v Barnard (1789) 2 Bro CC 585; 29 ER 320?

Accepted Answer

The answer of What was held in Sprange v Barnard...

Question 6

How can Hunter v Moss be distinguished from Re Goldcorp Exchange (1994) 3 WLR 199?

Accepted Answer

The answer of How can Hunter v Moss be distinguished...

Question 7

What are the consequences if certainty of subject matter is absent?

Accepted Answer

The answer of What are the consequences if certainty of...

Question 8

What is mean by certainty of object?

Accepted Answer

The answer of What is mean by certainty of object?...

Question 9

What is a Benjamin Order?

Accepted Answer

The answer of What is a Benjamin Order?...

Question 10

Which case set out the principle that settlors have to use words which show a clear intention to subject the recipient of the property to a binding obligation to hold that property on trust for a beneficiary?
A)Adams v Lindsell
B)Re Adams and Kensington Vestry
C)Pepper v Adams
D)Kensington v Smith

Accepted Answer

The case of Re Adams and Kensington Vestry set out the principle that settlors have to use words which show a clear intention to subject the recipient of the property to a binding obligation to hold that property on trust for a beneficiary.

Question 11

Certainty of intention means that it must be clear that the settlor truly wanted to establish a trust.

Accepted Answer

Certainty of intention is one of the three certainties required for a trust to be valid, alongside certainty of subject matter and certainty of objects. It means that the settlor's intention to create a trust must be clear and unequivocal.

Question 12

It is vital to establish all three certainties in order to create a valid trust.

Accepted Answer

The three certainties are necessary for the creation of a valid trust. They include the certainty of intention, subject matter, and object. Without these certainties, a trust cannot be created.

Question 13

The three certainties help to ensure that a trustee can properly manage a trust.

Accepted Answer

The three certainties - certainty of intention, certainty of subject matter, and certainty of objects - provide a framework for creating a trust that is clear and unambiguous, enabling the trustee to understand their duties and manage the trust assets properly.

Question 14

Precatory words are sufficient to create a trust.

Accepted Answer

Precatory words, which express a wish or hope, are generally not considered legally binding or sufficient on their own to create a trust without clear intent to impose a legal obligation.

Question 15

When creating the trust, the settlor must ensure that he correctly identifies the trust property, so that the trustee can be sure what property he is expected to hold on trust and administer for the benefit of the beneficiary.

Accepted Answer

This statement is true. The identification of trust property is an important step in creating a valid trust.

Question 16

If the trust property forms part of a larger identical 'batch' of intangible property, then it does need to be precisely identified by the settlor when creating the trust.

Accepted Answer

The question states that the trust property does not need to be precisely identified by the settlor when creating the trust if it forms part of a larger identical 'batch' of intangible property.

Question 17

Trustees of fixed trusts must be able to draw up a complete list of beneficiaries so that they can effectively manage the trust.

Accepted Answer

Trustees need to know who the beneficiaries are in order to ensure that their interests are being fulfilled and to make proper distributions from the trust. Without a complete list, it would be difficult to manage the trust effectively.

Question 18

Trustees for discretionary trusts decide who will benefit from the trust.

Accepted Answer

Trustees have the power to decide who will benefit from the trust and how much they will receive. They have the discretion to make decisions based on the terms of the trust and the needs of the beneficiaries.

Question 19

Express trusts exist to fill gaps.

Accepted Answer

Express trusts are created intentionally by a settlor to manage, protect, and pass on assets according to specific instructions, not merely to fill gaps.

Question 20

What was the test as set out by Lord Wilberforce in McPhail v Doulton (1971) AC 424.

Accepted Answer

The answer of What was the test as set out...

Quiz 5: Trust Formation: The Three Certainties