#17295 - Equitable Principles - GDL Equity and Trusts

Types of Trust

• Fixed trust - trustee must give property out to the named objects + has no discretion as to how it's to be distributed

• Discretionary trust - trustee must give property out to the named objects + has discretion as to how it's to distributed

• Discretionary power of appointment - trustee has discretion as to whether & to what extent to give the property out to named objects and, to the extent that he decides to do so, in what proportions

• Fixed power of appointment (least common) - trustee has discretion as to whether to give out the property to the named objects but, if he decides to give out, must do so in pre-determined proportions.

Trusts vs Powers

• Trusts impose obligations on trustees. A mere power has discretion.

• The court will enforce a trust not a power.

• The objects of a fixed trust must be certain, they may be more loosly described for a power

Examples of Powers

• Re Gulbenkian [1970] – to use the estate for the maintenance or personal support of a listed group

• Re Hay’ Settelment Trust [1982] - here there is a gift over in default, that typically indicate a power rather than a trust.

Classification of Trusts

• An express trust is usually deliberately set up by the settlor, though it may be deduced from their informal language or conduct.

  • A private express trust is for the benefit of individual persons.

  • A charitable express trust is for public purposes, not for private individuals as such.

• Other trusts may be implied by law, in some cases despite the intentions of the parties.

  • Resulting trusts occur when the property ‘results’ or ‘returns’ to the settlor, because settlor did not dispose of the trust property fully

  • Constructive trusts are trusts imposed by operation of law in a number of different circumstances, mostly to prevent an unconscionable outcome.

  • Trusts may also be implied by statute. For instance, on an intestacy, or where there is co-ownership of land, LPA 1925 imposes a trust of land.

• ‘Bare’ trusts exist where a beneficiary, who is a person of full capacity viz. over 18 years of age and of sound mind (sui juris), is absolutely entitled to the trust property

  • Beneficiaries may call for the trust property to be transferred to them or their nominee (so bringing the trust to an end) under the rule in Saunders v Vautier (1841)

Equitable Maxims:

• NB These are contradictory and so not used...