Overview There is enormous flexibility in relation to the terms on which trusts can be created. The main constraints are those of public policy. The former rules regarding the duration of trusts have been amended. It is now possible to apply to Court to vary trusts under new legislation, which commenced in 2010. Trusts allow a person to separate the […]
General Trusts were developed by the Courts of Equity. The essence of a trust is that it is a personal obligation imposed on an individual, the trustee, in order to protect the interests of the beneficiaries. This is a unique feature in the so-called common law jurisdictions, generally equivalent to the English-speaking world. The trust is at the heart of […]
Overview The origin of the constructive trust lies in the principle that courts of equity, as courts of conscience, will not permit a person in whose name legal title is taken, to retain it where this would amount to fraud or wrongdoing. In this context, fraud does not necessarily mean criminal fraud. It includes an abuse of a fiduciary position, […]
Fiduciaries Constructive trusts may be imposed where fiduciaries, such as company directors, partners etc., benefit from business opportunities belonging to the company, partnership, principal, employer etc. The principle behind constructive trusts is that the particular opportunity is in the nature of the property of the beneficiary or other protected person and belongs to him or her. A fiduciary relationship applies […]
Overview The obligations on trustees are onerous and exacting. They require the utmost integrity and honesty. The scenarios that arise in the administration of trusts can be complex and leave the trustee with difficult choices between the competing needs and interests of various beneficiaries. A trustee may be a private unpaid individual. He may be (although rarely is) the person […]
Purpose Trust A “purpose trust” has the objective of promoting a particular purpose. It may or may not be for the benefit of a person or a class of persons. A purpose trust is enforceable if it is for charitable purposes. An objection is that a purpose trust may endure indefinitely. A purpose trust would tie up property for prolonged periods […]
Invalidation Trusts may be void by reason of misrepresentation, fraud, undue influence and like factors, which operate on the maker (settlor). The principles are similar to those applicable to contracts and deeds generally. Purported trusts will fail if they lack the basic minimum requirements for trusts. If they lack the requisite certainty as to objects, assets or intention, they will […]
Present v Future In some situations, the duty on trustees to act fairly and proportionately requires them to convert certain assets from one form to another, so as not to jeopardise the interests of certain beneficiaries, in particular, future beneficiaries. The courts evolved certain rules in this context. They can be excluded expressly or by implication, and are usually excluded […]
Trusts of land. There is a statutory trust of land when the ownership of land is vested in persons in succession (e.g. present and future interests) without there being a trust in the instrument held, either with or without other property, on a trust vested in a minor (under 18 years). The first category covers most cases where ownership is […]
Trustee Powers A well-drawn trust instrument should contain the necessary and appropriate trustee powers. In the absence of instrument conferring power, recourse must be had to implied powers. The statutory implied powers available in Ireland are extremely narrow and are still largely based on nineteenth-century legislation. It has been proposed to update the legislation for several years. There may be […]
Requirement for Variation Generally, a trust must be implemented and given effect in accordance with its terms. Otherwise, the trustees may be in breach of trust. Apart from the statutory powers, a court will not, save in limited circumstances, allow the performance of acts which constitute a breach of trust. Trust may need to be adapted to meet changed circumstances […]
Privileges of Charities Charities enjoy some significant legal privileges. They are entitled to operate under a perpetual trust potentially accumulating funds indefinitely for the defined purposes provided in the charitable trust. The other significant advantages are in the areas of taxation. They enjoy various exemptions from rates, income and corporation tax, capital gains tax and gift tax. In order to obtain […]
Nature A power is an authority given by one person (the donor) to another person (the donee) to undertake legally significant acts on the donee’s behalf, typically the transfer or vesting of property. A power may stand alone or may be associated with a particular property or asset right. The two most important types of powers are powers of attorney and […]
Categories of Charitable Trust The classes of trusts which were potentially recognised as charitable are divided into four categories; trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes, beneficial to the community. The importance of the identification and characterisation of a trust as a charitable trust […]
Residual Category The fourth or residual class of recognised charitable object, refers to trusts for other purposes beneficial to the community. Whereas trusts for education, relief of poverty and religion are presumed to be for the public benefit, this does not apply to this latter category. It is not enough that the purpose is for the benefit of the public. […]
Courts and Statute Seek to Uphold In contrast to the position with a private trust, a charitable trust for undefined beneficiaries or broadly defined purpose will be readily upheld and given effect. When a trust/gift is made for the benefit of a charity and it is impossible and impracticable to discern the intention of the donor, the court on the applications […]
Regulator of Charities The 2009 Charities Act established the Charities Regulatory Authority. The functions of the pre-existing Commissioners of Charitable Donations and Bequests were transferred to the Charities Regulatory Authority. The former Commissioners played a function in relation to receipt of charitable gifts in wills and otherwise and made applications to Court to reorganise charitable gifts to which direct effect […]
Administrative The Authority, as successor to the Commissioners of Charitable Donations and Bequests, has a range of functions in relation to charities. In addition, the Charities Act conferred a much wider range of regulatory functions on the new Authority. Where a gift or bequest for charitable purposes is made, the Authority must be notified. It has powers to appoint new […]
Power to advise charity trustees Where the trustees of a charity apply to the Charities Regulatory Authority for their opinion or advice respecting the charity or the administration thereof or the property thereof or the application of the property or any question or dispute relating thereto or where the executors of a will containing a charitable devise or bequest apply […]
Breach of trust A trustee may be held personally liable for a breach of his or her duties as trustee or breach of the terms of the trust deed or the will trust. The breach may happen without fault on the trustee’s part. It may be due to negligence in investment or non-investment of trust assets. It may arise from […]