⇒ Trusts are one of the most important concepts in the English legal system
⇒ The modern trust is based on the idea of dual ownership: that is, both a legal and an equitable ownership
⇒ In a trust, the legal ownership is vested in one person or group of persons (the Trustees) while the beneficial, or equitable, ownership is vested in another person or persons (the beneficiaries or cestuis que trust).
⇒ The legal owners are obliged to use the property in accordance with the terms of the trust, for the benefit of the beneficiaries
⇒ The legal owners’, or trustees’, obligations are more extensive than ordinary contractual obligations.
⇒ There are three parties to a trust: settlor, trustee and beneficiary
⇒ Trusts are, generally, irrevocable: the settlor cannot later change their mind and recover the property. See, for example, the case of Re Bowden 
⇒ Traditionally, trusts have been used to control property, to keep it ‘in the family’, to provide for children and, in the days before the Married Woman’s Property Act, for married women: while married women could not own property in their own right, they could be the beneficiary of a trust.
⇒ Nowadays, trusts are used in other areas e.g. owning investments and pension funds.
⇒ A legal person, such as a company, may be a settlor, trustee or the beneficiary of a trust.
⇒ Saunders v Vautier (4 Beav. 115): where the beneficiary or beneficiaries are sui juris (i.e. over 18 and of sound mind), they can require the trustees to vest the legal title of the property in them.
⇒ This only applies where all possible beneficiaries agree and they must all be sui juris (including any beneficiaries who might come into being)
⇒ A trust is an express trust where the settlor has expressed his intention to form a trust. Although there is no requirement to use any particular form of words, the intention must be clear (Re Kayford 1975)
⇒ The most common example is where the settlor – the owner of the property – transfers property with a declaration, whether written or oral, that the transferee (i.e. trustee) is to hold the property on trust for the benefit of the named beneficiaries.
⇒ The owner of property may also declare that they hold property on trust for another without transferring it to a trustee. See the case of Hunter v Moss 
⇒ A constructive trust is a trust implied by law, when the circumstances are such that the conscience of the legal owner should be engaged. This may be, for example, where money is paid by mistake: the person who has the money will hold it on trust for the person who paid it.
⇒ See the separate notes on constructive trusts
⇒ Resulting trusts are implied by the court – they are not created intentionally by the settlor
⇒ See the separate notes on resulting trusts
⇒ Bare Trust:
⇒ Fixed Trust:
⇒ Discretionary Trust:
⇒ Public Trust e.g. charitable trusts
⇒ Trusts and contracts are separate concepts
⇒ A trust is an equitable relationship, which may arise by express agreement or from circumstances; there is no need for consideration for an equitable obligation to arise.
⇒ Privity question does not arise in trusts: a beneficiary of a trust may enforce it irrespective of whether they were party to original deed: Gregory and Parker v Williams 
⇒ There are other circumstances in which people hold other people's property: these may be bailment, agency and the stakeholder relationship.
⇒ A bank account is not a trust and the depositor (i.e. me) has no proprietary interest in the money in their account: the money belongs to the bank and they are free to use it as their own and keep any interest earned.
⇒ Relationship between bank and depositor is contractual: if the bank goes insolvent, the depositor is a creditor and must prove their debt: Foskett v McKeown 
⇒ Dead persons cannot own property. On the death of a person, the legal title to all their real and personal property devolves, by operation of law, in their executors.
⇒ Although the executor owes fiduciary duties, including a duty to account and a duty not to profit from his or her role, they are not a trustee of the property: Commissioner of Stamp Duties (Queensland) v Livingston 
⇒ Principle reason to distinguish property on trust and a contractual obligation to repay is that a trust will survive the insolvency of a company or bankruptcy of an individual
⇒ If you don't have a trust you will be a creditor and have to ‘prove’ your debt
⇒ Discretions must be exercised. Powers need not be exercised, but must be considered
⇒ Whether a provision in a trust instrument creates a trust, a discretionary trust or a power is a matter of the construction of the instrument: Wilson v Turner (1883)
⇒ Powers to distribute or dispose trust property, whether by making a person a beneficiary or by giving them income/capital are ‘powers of appointment’: this does not need to be exercised.
⇒ Although the “trustee is not bound to exercise it” this “does not mean that he can simply fold his hands and ignore” it (Re Hay’s Settlement Trust  (Megarry VC))
⇒ There will also be administrative and managerial powers given to the trustees to deal with the trust property so as to maintain its value.
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