Legal and Beneficial Ownership In most cases, the same person will be both legal and beneficial owner of property. In some cases, an arrangement may be made by which the legal owner will hold the property for one or more beneficial owners. In other cases, the law will deem that the legal owner holds the property for one or more […]
Background in Equity The trust is very much the creation of the law of equity. Historically, equity was dispensed by the courts of equity. The courts of equity merged with the courts of law in 1877 so that equity and law are applied in all courts. In most cases, the equitable rules take precedence over the rules of “law”. In […]
Basic Requirements In order to create a valid trust, there must be certainty as to the intention of the creator (the settlor), certainty as to the assets the subject of the trust and certainty as to the beneficiaries or, at least, the potential beneficiaries. Sometimes assets are given to another, with the express or implied hope or wish that the […]
Role of Trustee The essence of the trust is that the trustee holds the assets and that the trust obligations are enforceable against them personally by the beneficiaries. Any person may act as a trustee although, for reasons of prudence and convenience, it is best to appoint a trustworthy and experienced person. Companies or so-called “trust corporations” may be formed […]
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 […]
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 […]
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 […]
Nature of Powers of Attorney A power of attorney is a grant of a power by one person (the donor) to another (the donee) to undertake legally significant acts on behalf of the donor. A power of attorney must be in writing and must be executed as a deed. The person granted power under the power of attorney, the donee, […]