[1] According to the charities Act 2011, the

1
Panesar textbook – section on dehor justification

2
Panesae textbook – section on dehors justification

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3
Panesar textbook – section on acceptance of the trust

4 https://www.legislation.gov.uk/ukpga/Geo5/15-16/19/section/36

5
Panesar textbook, Farwell judgement on the Re Stead case.

6 https://www.legislation.gov.uk/ukpga/Geo5/15-16/19/section/36

7 https://www.investopedia.com/terms/i/intervivostrust.asp

8
Panesar textbook – section on intending to create a trust in the secret trust
mutual wills bit

9
Panesar textbook – the communication of the trust in the secret trust and mutual
wills.

10
Panesar textbook – testator must communicate facts and existence of the trust

11 Panesar textbook – Re Keen case in secret trust and mutual
wills

12
Panesar textbook – acceptance of the trust – secret trusts and mutual wills

13 Panesar
textbook – Re Keen case in secret trust and mutual wills

14
Panesar textbook – justifications for secret trusts – dehor theory
justification

15
Panesar textbook – fraud justification for the enforcement of secret trusts

16 https://www.legislation.gov.uk/ukpga/Geo5/15-16/23/section/55

17
Panesar textbook – certainty of intention as per Lord Langdale Mr – three
certainties section

18 Panesar textbook – certainty of subject as per Lord
Langdale Mr – three certainties section

 

19 Panesar
textbook – certainty of object as per Lord Langdale Mr – three certainties
section

20 https://www.gov.uk/trusts-taxes/types-of-trust

21
Panesar textbook – the three certainties – Re Thompson’s Estate – subject
matter of the trust

22 https://www.legislation.gov.uk/ukpga/2011/25/section/3

 

 

·        
According to the charities Act 2011,
the Tate Modern Museum is a legible for a charitable trust because in section 3(1)(f) “the advancement of the arts, culture, heritage or
science” falls into charitable purposes.22
As result, the Tate Modern Museum is legible for a charitable purpose trust of
the income remaining from the siblings. This trust will be enforced by the
Attorney General of the Crown.

·        
Re Thompson’s Estate 1879 – testator left all of his property to his
wife to be disposed of a she might think proper and that in the event of her
death, should there be anything remaining, to certain name persons. Hall VC –
widow took husband’s property for life only with a power of disposition during
her life – but not by will – and that anything remaining belonged to the named
persons. (all information on this case found in my Panesar Equity and Trust
textbook – three certainties).21
In my
scenario = Lucy leaves instructs the trustees to give the income of
the residuary estate to the siblings for life and then the remaining income to
go to the Tate Modern Museum, here, the siblings have a life interest in the
property much like the widow in Re Thompson’s estate 1879 and thus
anything remaining to go to the Tate Modern Museum is perfectly valid just like
Hall VC’s judgement that anything remaining belonged to the
names persons in the case.

·        
The siblings, in this case, because they are
receiving the income of the residuary estate, they are the interest
beneficiaries who are subject to an interest in possession trust. 20https://www.gov.uk/trusts-taxes/types-of-trust

·        
Is there certainty of object matter? “Requires
that the beneficiaries of the trust be defined by some meaning which is
understood both by the trustee and ultimately the court.”19
 The beneficiaries are the siblings and
the Tate Modern Museum.

·        
Is there certainty of subject matter? “Requires
that the property to which the trust is to attch be defined with precision.”18
Yes. The income of the residuary estate is to be given to Lucy’s siblings.

·        
Is there are certainty of intention? “Requires
testator to use such language or demonstrate such conduct that it will impose
an imperative obligation on the trustees to deal with the trust property in
accordance with the settlor’s intentions.”17
Yes. It is clear that in the will, the trustees are given the residuary estate
to then give its income to the siblings for life (life interest) and then for
the remaining income to go the Tate Modern Museum. the intention is valid as
Lucy has emphasised that once the residuary estate is vested in the trustees,
they are to give its income to the siblings.

·        
The way in which the residuary estate is to be
given to the siblings is via a testamentary gift – the executors must transfer
it to those in the will.

·        
The trustees are given a life interest in the
residue estate as residuary beneficiaries and then the remaining estate once
they have passed is to go to the Tate Modern Museum.

·        
This fixed trust is situated in cl.5 gift of
residue.

·        
Personal reps of the testator are vested the
property which they are to hold on trust for the beneficiaries = Astrid and
Fahari hold residuary estate income on trust for the beneficiaries who are
Lucy’s siblings.

About
the fixed testamentary trust in the scenario:

·        
The personal chattels – they are being used
partly for business purposes, not solely and therefore, there seems to be no
conflict with section 55 of the Administration of Estate Act 1925.16

·        
Dehor justification: this trust works
perfectly as dehors the will, it is an inter vivos trust which does not
conflict with the provisions within the Wills Act 183715

·        
When is the transfer complete: similar to
half-secret trusts, fully secret trusts are perfectly constituted as soon as
the testator transferred the property to the trustee, thus as soon as the
trustee is vested the property which happens once the execution of the will occurs.
The reason as to this operation is because a fully secret trust, like a
half-secret trust, is an inter vivos trust as it is made during the lifetime of
the settlor. Unlike Fahari’s situation, Astrid has accepted to carry out the
fully secret trust without revocation of acceptance and therefore the property
is correctly vested in Astrid and thus the fully secret trust is constituted. 14

·        
What’s being transferred: according to the
letter which Lucy sent to Astrid, it is the property which she has given to
Astrid absolutely to confer benefit upon Harry Prince as a secret beneficiary.
This is found in cl.3 of the Will – titled ‘My Personal Chattels’ – therefore
we have the subject matter clarified.

·        
Acceptance: acceptance in a fully secret trust
is also very similar to acceptance in a half-secret trust. The intended trustee
must accept the trusteeship as this stops the fully secret trustee from
claiming what is theirs on the face of the will. This acceptance can be made
via expressed acceptance or acceptance construed from silence12. In the
scenario = Astrid expressly
agrees to the first letter which Lucy sent to her whereby Lucy told Astrid that
she will know who the property is to go to on her death via a sealed envelope.
Her text message ‘of course I will do whatever you have requested’ covers this
acceptance. Also, because Astrid has agreed, she has also agreed to receiving
the sealed envelope instructions again reflected in Re Keen 1937 whereby the trustee is bound by its contents as
soon as they accept the trust.13

·        
Communication: terms of the trust including
its existence and its facts should be communicated to the trustee. For a fully
secret trust, the communication must be made before the death of the testator
and either before or after the execution of the will9.
In the
scenario = communication of
the existence of the trust is made before the death of Lucy whereas the
communication of the facts, via the sealed envelope is done on Lucy’s death.
This sealed envelope is a perfectly legitimate way to convey who the objects of
the fully-secret trust as long as there is a link between the fact that the
trustee is aware that he will receive property in the will subject to a secret
trust (Astrid is aware of this via the first letter which Lucy sent her) and
the letter must be connected to the secret trust and the will10
(again evident in Lucy’s letter to Astrid). Re Keen 193711 – Wright MR: used analogy of ship sailing under
sealed order – ‘sailing under sealed orders even though the exact terms of the
property are not ascertained by the captain till later.’

·        
Intention: testator
must intend to create a trust for secret B by demonstrating, in substance, that
the testator intended to confer a benefit upon B and in doing so, imposes
imperative obligations upon the trustee8.
In the
scenario = the intention has been communicated via a letter from
Lucy to Astrid whereby Lucy – “please leave the property that I leave you as a
gift in my will to the person whose details are in the envelope in the safe in
my Camden Workshop.”

·        
The basis for creating a fully secret trust in
terms of intention, communication and acceptance is very similar to that of a
half-secret trust.

About
the fully-secret trust in the scenario:

·        
https://www.investopedia.com/terms/i/intervivostrust.asp = because this inter vivos trust has
not been fully constituted, it conflicts with the will. Inter vivos trusts are
supposed to help avoid prbate – where the courts distribute the assets of the
deceased7
– because no-one is taking the property, it is likely that the court will
distribute it to Lucy’s siblings.

·        
Had this issue not happened, the half-secret
trust would have worked perfectly because the half-secret trust would have
operated dehors the will

·        
Therefore, because no other personal
representative can hold property at the time of the execution of the will, the
property is held on resulting trust to the testators estate.

·        
Usually, in the event of a secret trustee
disclaiming the trust, then the personal representatives of the testator must
hold the property for the intended trustee (according to section 36 of the
Trustee Act 1925).4
The issue here is that the personal
representatives of the testator are Fahari and Astrid. Astrid cannot take up
position to hold half-secret trust for Kate and William as she has not been
communicated anything that had been communicated with Fahari about Lucy’s
creation of a half-secret trust. According to Farwell’s judgement in the case
of Re
Stead, communication to more
than one trustee that doesn’t occur where A is aware of the trust but C is note
as tenants of property in common, C is not bound by the trust – Astrid is not
bound by the trust. Allowing a beneficiary to enforce a trust that Astrid
didn’t even know about against her means depriving Astrid of her rights5.
Section 36 also states that the appointment of a new trustee by the personal
reps should be made in writing6
– there is no document in existence to establish that Astrid/Fahari has
searched and appointed another trustee. https://www.legislation.gov.uk/ukpga/Geo5/15-16/19/section/36

·        
The issue which
arises from this is that Fahari revokes acceptance as half-secret trustee for
fear of the press interest around this gift – she sent a letter to Lucy
explaining this but, although she received it, Lucy did not reply before her
death. Because Fahari has revoked as trustee, which she is allowed to do as
long as this revocation is before the testator’s death, Lucy should have found
a replacement trustee to carry out the half-secret trust in favour of the
half-secret beneficiaries3.
But because Lucy has failed to do this, there is no trustee holding the
property for the half-secret beneficiaries and therefore, no property is being
vested in any trustee = trust is not fully constituted and will be held on
resulting trust to the testator’s estate.

·        
The creation of the half-secret trust was done
via the testator’s lifetime by communicating to Fahari that she is to receive
property in the testator’s will to hold on trust and communicated the intention
of the trust1,
she also devised the trust property to the secret trustee to hold on trust2
in the will cl.2 – but lucy did not communicate the purpose – she did however
communicate the facts of the trust. The half-secret trust remains incompletely
constituted up until the death of testator and execution of will which perfects
the transfer.

·        
The object matter is the Windsors – found within
notes and discussion of the half secret trust between Fahari and Lucy – written
and oral declaration.

·        
The intention to create a half-secret trust has
been manifested through the notes Lucy has given to Fahari as her solicitor and
the wording in the will where the people are not disclosed.

·        
The subject matter is the gift.

·        
In clause 2, the beneficiaries who are to
receive the painting (subject matter) are not disclosed in the will but were
disclosed to Fahari via the ‘notes’ from previous meetings with Lucy where Lucy
told Fahari that the gift was to be conferred upon two university friends Kate
and William Windsor.

·        
Found in clause 2 of the will. Intention to
create a trust for secret B amount in notes from Fahari’s meetings and there
was, initially acceptance.

·        
Was legitimately made – communication was made
before or at the same time as the execution of the will and the testator
communicated both existence and facts of the trust

About
the Half-secret trust in the scenario:

·        
Fixed trust – trustees to divide income amongst
the three siblings, giving them a life interest in residuary estate then the
remainder once they have died to go to the Tate Modern Museum.

·        
Fully secret trust – Astrid to receive property
as a gift on the face of the will but is actually a secret trustee for the
secret beneficiary Harry Prince – clause 3 of the Last Will and Testament.

·        
Half-secret trust – Fahari as half-secret
trustee for the secret beneficiaries Kate and William Windsor – Clause 2 of the
Last Will and Testament.