Property Law - Express Trusts
LAW317 – Express Trusts
Ways to create a trust
1) Declaration – where a title holder expresses his or hers intention to hold their property on trust for another.
2) Transfer - where title is transferred to a person with instructions that it be held on trust for another.
- inter vivos occurs during the life of the person (referred to as a ‘settlement’). It may be for consideration or a gift. (NB: Equitable Assignment check list).
- post mortem occurs after the death of the person (in their will).
3) Direction – where a beneficiary instructs their trustee to hold an interest on trust for another person.
Kinds of Trust
Trusts are either:
1. Express Trusts (being examined in this lecture).
2. Charitable Trusts
3. Resulting Trusts (intention presumed)
4. Constructive Trusts (used as a remedy)
Three Certainties
The law of equity states that a trust must satisfy the 3 certainties. If any of the 3 certainties do not eventuate, the trust will fail:
Certainty of Intention – it must be clear that the settlor or testator/testatrix (person creating a trust) wanted the trust to exist.
Resulting (intention presumed) and Constructive (used as a remedy) trusts are immune from this certainty.
Intention does NOT need to be expressed through the word ‘trust’. Only the elements of a trust need to be present.
Commissioner of Stamp Duties v Joliffe (1920) 28 CLR 178
- At this stage Qld law stated that a person could only have 1 bank account.
- Joliffe set up a 2nd bank account, as a ‘trust account’ for his wife.
- When Joliffe’s wife died, death taxes/duties were owed on the account.
- Joliffe went to court and argued that he lied and wasn’t actually holding the account on trust for his wife – it was for him.
- HC agreed with Joliffe.
- Rule: If it is possible for the creator of the trust to display to the court that he never/did intend for a trust to exist, the presence or absence of the words ‘trust’ or ‘trustee’ is irrelevant.
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Ways to create a trust
1) Declaration – where a title holder expresses his or hers intention to hold their property on trust for another.
2) Transfer - where title is transferred to a person with instructions that it be held on trust for another.
- inter vivos occurs during the life of the person (referred to as a ‘settlement’). It may be for consideration or a gift. (NB: Equitable Assignment check list).
- post mortem occurs after the death of the person (in their will).
3) Direction – where a beneficiary instructs their trustee to hold an interest on trust for another person.
Kinds of Trust
Trusts are either:
1. Express Trusts (being examined in this lecture).
2. Charitable Trusts
3. Resulting Trusts (intention presumed)
4. Constructive Trusts (used as a remedy)
Three Certainties
The law of equity states that a trust must satisfy the 3 certainties. If any of the 3 certainties do not eventuate, the trust will fail:
Certainty of Intention – it must be clear that the settlor or testator/testatrix (person creating a trust) wanted the trust to exist.
Resulting (intention presumed) and Constructive (used as a remedy) trusts are immune from this certainty.
Intention does NOT need to be expressed through the word ‘trust’. Only the elements of a trust need to be present.
Commissioner of Stamp Duties v Joliffe (1920) 28 CLR 178
- At this stage Qld law stated that a person could only have 1 bank account.
- Joliffe set up a 2nd bank account, as a ‘trust account’ for his wife.
- When Joliffe’s wife died, death taxes/duties were owed on the account.
- Joliffe went to court and argued that he lied and wasn’t actually holding the account on trust for his wife – it was for him.
- HC agreed with Joliffe.
- Rule: If it is possible for the creator of the trust to display to the court that he never/did intend for a trust to exist, the presence or absence of the words ‘trust’ or ‘trustee’ is irrelevant.
-