1Panesar textbook – section on dehor justification 2Panesae textbook – section on dehors justification 3Panesar textbook – section on acceptance of the trust4 https://www.legislation.gov.uk/ukpga/Geo5/15-16/19/section/365Panesar textbook, Farwell judgement on the Re Stead case.
6 https://www.legislation.gov.uk/ukpga/Geo5/15-16/19/section/367 https://www.
investopedia.com/terms/i/intervivostrust.asp8Panesar textbook – section on intending to create a trust in the secret trustmutual wills bit9Panesar textbook – the communication of the trust in the secret trust and mutualwills.10Panesar textbook – testator must communicate facts and existence of the trust11 Panesar textbook – Re Keen case in secret trust and mutualwills12Panesar textbook – acceptance of the trust – secret trusts and mutual wills13 Panesartextbook – Re Keen case in secret trust and mutual wills14Panesar textbook – justifications for secret trusts – dehor theoryjustification15Panesar textbook – fraud justification for the enforcement of secret trusts16 https://www.legislation.gov.uk/ukpga/Geo5/15-16/23/section/5517Panesar textbook – certainty of intention as per Lord Langdale Mr – threecertainties section 18 Panesar textbook – certainty of subject as per LordLangdale Mr – three certainties section 19 Panesartextbook – certainty of object as per Lord Langdale Mr – three certaintiessection20 https://www.
gov.uk/trusts-taxes/types-of-trust21Panesar textbook – the three certainties – Re Thompson’s Estate – subjectmatter 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 orscience” falls into charitable purposes.
22As result, the Tate Modern Museum is legible for a charitable purpose trust ofthe income remaining from the siblings. This trust will be enforced by theAttorney General of the Crown.· Re Thompson’s Estate 1879 – testator left all of his property to hiswife to be disposed of a she might think proper and that in the event of herdeath, should there be anything remaining, to certain name persons. Hall VC –widow took husband’s property for life only with a power of disposition duringher life – but not by will – and that anything remaining belonged to the namedpersons. (all information on this case found in my Panesar Equity and Trusttextbook – three certainties).21In myscenario = Lucy leaves instructs the trustees to give the income ofthe residuary estate to the siblings for life and then the remaining income togo to the Tate Modern Museum, here, the siblings have a life interest in theproperty much like the widow in Re Thompson’s estate 1879 and thusanything remaining to go to the Tate Modern Museum is perfectly valid just likeHall VC’s judgement that anything remaining belonged to thenames persons in the case.· The siblings, in this case, because they arereceiving the income of the residuary estate, they are the interestbeneficiaries who are subject to an interest in possession trust.
20https://www.gov.uk/trusts-taxes/types-of-trust· Is there certainty of object matter? “Requiresthat the beneficiaries of the trust be defined by some meaning which isunderstood both by the trustee and ultimately the court.”19 The beneficiaries are the siblings andthe Tate Modern Museum.
· Is there certainty of subject matter? “Requiresthat the property to which the trust is to attch be defined with precision.”18Yes. The income of the residuary estate is to be given to Lucy’s siblings.· Is there are certainty of intention? “Requirestestator to use such language or demonstrate such conduct that it will imposean imperative obligation on the trustees to deal with the trust property inaccordance with the settlor’s intentions.”17Yes.
It is clear that in the will, the trustees are given the residuary estateto then give its income to the siblings for life (life interest) and then forthe remaining income to go the Tate Modern Museum. the intention is valid asLucy 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 begiven to the siblings is via a testamentary gift – the executors must transferit to those in the will.
· The trustees are given a life interest in theresidue estate as residuary beneficiaries and then the remaining estate oncethey have passed is to go to the Tate Modern Museum. · This fixed trust is situated in cl.5 gift ofresidue.· Personal reps of the testator are vested theproperty which they are to hold on trust for the beneficiaries = Astrid andFahari hold residuary estate income on trust for the beneficiaries who areLucy’s siblings. Aboutthe fixed testamentary trust in the scenario: · The personal chattels – they are being usedpartly for business purposes, not solely and therefore, there seems to be noconflict with section 55 of the Administration of Estate Act 1925.16· Dehor justification: this trust worksperfectly as dehors the will, it is an inter vivos trust which does notconflict with the provisions within the Wills Act 183715· When is the transfer complete: similar tohalf-secret trusts, fully secret trusts are perfectly constituted as soon asthe testator transferred the property to the trustee, thus as soon as thetrustee 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 ahalf-secret trust, is an inter vivos trust as it is made during the lifetime ofthe settlor. Unlike Fahari’s situation, Astrid has accepted to carry out thefully secret trust without revocation of acceptance and therefore the propertyis correctly vested in Astrid and thus the fully secret trust is constituted.
14· What’s being transferred: according to theletter which Lucy sent to Astrid, it is the property which she has given toAstrid absolutely to confer benefit upon Harry Prince as a secret beneficiary.This is found in cl.3 of the Will – titled ‘My Personal Chattels’ – thereforewe have the subject matter clarified. · Acceptance: acceptance in a fully secret trustis also very similar to acceptance in a half-secret trust.
The intended trusteemust accept the trusteeship as this stops the fully secret trustee fromclaiming what is theirs on the face of the will. This acceptance can be madevia expressed acceptance or acceptance construed from silence12. In thescenario = Astrid expresslyagrees to the first letter which Lucy sent to her whereby Lucy told Astrid thatshe 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 thisacceptance. Also, because Astrid has agreed, she has also agreed to receivingthe sealed envelope instructions again reflected in Re Keen 1937 whereby the trustee is bound by its contents assoon as they accept the trust.13· Communication: terms of the trust includingits existence and its facts should be communicated to the trustee. For a fullysecret trust, the communication must be made before the death of the testatorand either before or after the execution of the will9.
In thescenario = communication ofthe existence of the trust is made before the death of Lucy whereas thecommunication 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 ofthe fully-secret trust as long as there is a link between the fact that thetrustee is aware that he will receive property in the will subject to a secrettrust (Astrid is aware of this via the first letter which Lucy sent her) andthe 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 undersealed order – ‘sailing under sealed orders even though the exact terms of theproperty are not ascertained by the captain till later.’ · Intention: testatormust intend to create a trust for secret B by demonstrating, in substance, thatthe testator intended to confer a benefit upon B and in doing so, imposesimperative obligations upon the trustee8.In thescenario = the intention has been communicated via a letter fromLucy to Astrid whereby Lucy – “please leave the property that I leave you as agift in my will to the person whose details are in the envelope in the safe inmy Camden Workshop.
” · The basis for creating a fully secret trust interms of intention, communication and acceptance is very similar to that of ahalf-secret trust.Aboutthe fully-secret trust in the scenario: · https://www.investopedia.
com/terms/i/intervivostrust.asp = because this inter vivos trust hasnot been fully constituted, it conflicts with the will. Inter vivos trusts aresupposed to help avoid prbate – where the courts distribute the assets of thedeceased7– because no-one is taking the property, it is likely that the court willdistribute it to Lucy’s siblings.· Had this issue not happened, the half-secrettrust would have worked perfectly because the half-secret trust would haveoperated dehors the will · Therefore, because no other personalrepresentative can hold property at the time of the execution of the will, theproperty is held on resulting trust to the testators estate.
· Usually, in the event of a secret trusteedisclaiming the trust, then the personal representatives of the testator musthold the property for the intended trustee (according to section 36 of theTrustee Act 1925).4The issue here is that the personalrepresentatives of the testator are Fahari and Astrid. Astrid cannot take upposition to hold half-secret trust for Kate and William as she has not beencommunicated anything that had been communicated with Fahari about Lucy’screation of a half-secret trust. According to Farwell’s judgement in the caseof ReStead, communication to morethan one trustee that doesn’t occur where A is aware of the trust but C is noteas tenants of property in common, C is not bound by the trust – Astrid is notbound by the trust. Allowing a beneficiary to enforce a trust that Astriddidn’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 personalreps should be made in writing6– there is no document in existence to establish that Astrid/Fahari hassearched and appointed another trustee. https://www.legislation.gov.uk/ukpga/Geo5/15-16/19/section/36 · The issue whicharises from this is that Fahari revokes acceptance as half-secret trustee forfear of the press interest around this gift – she sent a letter to Lucyexplaining this but, although she received it, Lucy did not reply before herdeath.
Because Fahari has revoked as trustee, which she is allowed to do aslong as this revocation is before the testator’s death, Lucy should have founda replacement trustee to carry out the half-secret trust in favour of thehalf-secret beneficiaries3.But because Lucy has failed to do this, there is no trustee holding theproperty for the half-secret beneficiaries and therefore, no property is beingvested in any trustee = trust is not fully constituted and will be held onresulting trust to the testator’s estate.· The creation of the half-secret trust was donevia the testator’s lifetime by communicating to Fahari that she is to receiveproperty in the testator’s will to hold on trust and communicated the intentionof the trust1,she also devised the trust property to the secret trustee to hold on trust2in the will cl.2 – but lucy did not communicate the purpose – she did howevercommunicate the facts of the trust. The half-secret trust remains incompletelyconstituted up until the death of testator and execution of will which perfectsthe transfer.· The object matter is the Windsors – found withinnotes and discussion of the half secret trust between Fahari and Lucy – writtenand oral declaration. · The intention to create a half-secret trust hasbeen manifested through the notes Lucy has given to Fahari as her solicitor andthe wording in the will where the people are not disclosed.
· The subject matter is the gift.· In clause 2, the beneficiaries who are toreceive the painting (subject matter) are not disclosed in the will but weredisclosed to Fahari via the ‘notes’ from previous meetings with Lucy where Lucytold Fahari that the gift was to be conferred upon two university friends Kateand William Windsor. · Found in clause 2 of the will. Intention tocreate a trust for secret B amount in notes from Fahari’s meetings and therewas, initially acceptance.· Was legitimately made – communication was madebefore or at the same time as the execution of the will and the testatorcommunicated both existence and facts of the trustAboutthe Half-secret trust in the scenario: · Fixed trust – trustees to divide income amongstthe three siblings, giving them a life interest in residuary estate then theremainder once they have died to go to the Tate Modern Museum. · Fully secret trust – Astrid to receive propertyas a gift on the face of the will but is actually a secret trustee for thesecret beneficiary Harry Prince – clause 3 of the Last Will and Testament.
· Half-secret trust – Fahari as half-secrettrustee for the secret beneficiaries Kate and William Windsor – Clause 2 of theLast Will and Testament.