Posted: February 3rd, 2015

Trust and Equity Law

Paper, Order, or Assignment Requirements

 

 

Over the last 40 years, Oscar Osano, a renowned jeweller and diamond merchant, has amassed a considerable fortune by trading in the best quality merchandise supplied to him by his cousin, Dario Darnelli. Oscar’s assets include a small collection of valuable watches and 5,000 shares, worth £5 million, in a privately owned company, Lustrano Limited.

Oscar has never married and his closest relations are his three sisters, who are all independently wealthy. From the outset, he has been ably assisted in his business affairs by his childhood friend, Zara, whom he trusts implicitly. Whilst Zara is loyally devoted to Oscar, she feels a deep-rooted sense of antagonism towards his sisters, who used to make fun of her as a child because her family was poor. However, she has never disclosed any of this to Oscar.

Shortly before going on a Caribbean cruise last month to celebrate his retirement, Oscar executed a Deed of Settlement, in which he appointed Dario as trustee. Clauses 1 and 2 of this Deed read as follows:

1. To my friend and managing agent, Zara, my ten diamond-encrusted watches secure in the belief that she will deliver them up to my three sisters, Anna, Bella and Clara, two of these watches to Anna as she (Anna) may choose and the others to Bella and Clara between them;
2. To Dario, 2,000 of my shares in Lustrano Limited to be distributed in whatever   manner   he   considers   appropriate   amongst   those   who purchased jewellery from my retail premises at 25 Park Lane, Lyndon on the day the store opened and who still have such item in their possession. If Dario is not inclined to do this, the majority of the shares are to pass to him absolutely.

On the same day (30th September 2014), Oscar made a Will appointing his solicitor, Greta Granforth, as executor and trustee. The Will contains the following provision:

(a) All my estate on trust to be divided equally between all the employees of Fix-It Limited who completed the building work at 25 Park Lane, Lyndon to enable the store to be opened for business on schedule on 1st May, 1974

Oscar was born on 30th April 1944 and, the following day, his father, Theo, was killed at the age of 30 years, whilst trying to protect his diamond warehouse in Amsterdam from the Nazis. As soon as Oscar was old enough to understand what had happened, it became his overriding ambition to open his first jewellery store for business on the 30th anniversary of Theo’s death. A selection of commemorative items was offered for sale to mark the occasion.

Fix-It Ltd is still trading and has a workforce of 50 employees, being broadly the same in number to its size during the 1970s. However, its original premises were demolished in 1999 and the Company has since been trading from a different site.

A fortnight ago, the cruise-ship on which Oscar was sailing was destroyed by a freak tornado. On hearing the news, Anna suffered a heart attack and although it was hoped that she would make a full recovery, she sadly died 2 weeks later in Dario’s car on her way home from hospital.

Advise Greta Granforth on the validity and effect of Clause (a) of Oscar’s Will and whether any of the assets mentioned in Clauses 1 and 2 of the Deed of Settlement are likely to comprise part of Oscar’s estate on his death.  

Please note: You are not required to discuss the formalities (if any) required for creation of a trust or whether constitution is satisfied in relation to any of the assets referred to in this question.

 

• Strict Word limit with 1500*UK style please*
• Illustrate cases to support the answer*
• Use IRAC: Issue, Rule, Application, and Conclusion*
• Have a look at the tow answered attachment its coursework question from last year

You can look at to know the style of the answer *

• Be sure please Use OSCOLA style of reference *
• There is two drafts may help you*

Some reminders of what you have studied in relation to the Three Certainties

1. Structure

 

• Do not consider the formalities for creation of a trust and do not consider the need for the trust to be fully constituted
• You need to comment on the validity and effect of the clauses of the Deed of Settlement and the Will which you are specifically asked to consider – in order to deal with the issue of the assets passing under the Will, you will need firstly to discuss the validity and effect of both clauses in the Deed of Settlement
• Do not omit any of the clauses/issues you are asked to consider because you will automatically forfeit a sizeable percentage of the marks. Apportion your words sensibly and leave yourself enough of the word count of 1500 words and enough preparation time to deal with all the provisions properly, including the clause in the Will which you are asked to discuss
• Deal with the Deed of Settlement first to determine whether or not valid lifetime dispositions have been created ie those which are to take effect during the lifetime of the settlor/donor – remember that a lifetime trust of personal property and a lifetime power comprising personal property will take effect from the moment that they are declared. If a valid lifetime trust or power has been created, then the property which is the subject matter of the trust or power will not comprise part of the settlor’s/donor’s estate when he dies.
• Once you have dealt with the lifetime dispositions contained in the Deed of Settlement and decided whether or not they are valid, you are then in a position to deal with the clause of the Will which you have been asked to discuss
• Whenever a Will is made, you should still deal with the provisions of the lifetime dispositions in the Deed of Settlement first because, if valid, the lifetime dispositions will come in to effect before the provisions in the Will – a Will only takes effect from the date of the settlor’s death regardless of when the Will was made
• The person who creates a lifetime trust is called a settlor
• The person who makes a Will is called a testator (if male) and a testatrix (if female) although it is not incorrect to refer to such a person as a settlor if you are dealing with a purported trust in a Will
• A person who makes a power is called a donor and the person asked to carry out the terms of the power is a donee. The proposed beneficiaries under a power are the potential appointees
• The term, ‘donee’ is used in various differing contexts:
  • To describe the person to whom a power of appointment is given (such a person cannot benefit under the power unless he also happens to fall within the class of objects designated by the person creating the power (the donor)
  • To describe the recipient of a gift over in default of appointment, following a power of appointment. A donee under a gift over in default of appointment will be able to take the property beneficially provided that the ‘gift over’ is otherwise valid.
  • To describe a person who is subject only to a moral obligation to hold assets on behalf of another; this will occur where the settlor uses precatory words such that it is impossible to find the necessary intention to create a trust: Lassence v Tierney. The donee here will be able to retain the assets absolutely (provided that the subject matter of the gift is certain on the ‘what’ question), as long as the donee is deemed not to be acting in a purely representative capacity

 

• The assets contained in a lifetime trust must be held by a trustee or trustees
• The assets contained in a trust made by Will (a testamentary trust) must also be held by a trustee or trustees – such a person or persons are often the same as the executor(s) of the Will, that is, the person(s) required by the deceased person to administer the Will
• Read the question very carefully because all the facts given are relevant to how you respond to the various dispositions within the Deed of Settlement and the Will – ensure that you explain the relevant legal principles and apply them to the facts of the case and that you also use the facts given to enable you to interpret and use the legal principles accurately in the context of both the Deed of Settlement and the Will
• Include a brief introduction (no more than one short paragraph) and a very brief overall conclusion to your entire work but make sure that in your overall conclusion, you do not contradict your earlier analysis of the same point (this is in addition to the conclusion which you will need to incorporate at the end of each disposition – see later)
• Deal with each disposition one by one (Clauses One of the Deed of Settlement first; then Clause Two of the Deed of Settlement; then Clause (a) of the Will; taking the 3 certainties and applying them methodically to each of these Clauses before moving to the next one – the best order is intention, subject matter and objects. If you feel that one or more of the certainties is particularly relevant and the other(s) less so, then mention the less relevant ones more briefly and focus the bulk of your answer for that disposition on the certainty or certainties that are most problematic to the validity of the clause under consideration. In other words, reserve most of your words for what is most likely to be in issue.

 

2. Take care:
   • The term ‘precatory wording’ should only be used in the context of certainty of intention. It has nothing whatsoever to do with certainty of subject matter or objects. There will be an occasion when you need to consider precatory wording to decide whether certainty of intention exists
   • Never discuss or mention conceptual certainty in the context of certainty of intention. Conceptual certainty is relevant primarily to certainty of objects both in a trust and a power (such as ‘my old friends’ or ‘my urgent suppliers’) though you will sometimes find this term also applied to linguistic (semantic) uncertainty of subject matter (words such as ‘bulk’ or ‘majority’ which mean different things to different people)
   • Always conclude your discussion of each disposition with a brief summing up to explain what will happen to the trust property – do not leave your analysis dangling in mid air
   • Incorporate your explanation of the legal principles within the specific disposition to which they most appropriately relate – do not simply talk about them in a vacuum
   • Make sure that you apply the legal principles (once you have explained them) to the facts.

 

3. Points on the three certainties

 

• Certainty of intention (note that intention to create a trust applies only to trusts – not to powers)

 

• If you think that you are dealing with a power, do not waste words in discussing certainty of intention to create a trust. If there is a gift over in default of appointment, it will be a power – this is because the presence of such a gift over (eg if my donee chooses not to do this, then to X) is inconsistent with the imperative nature of a trust: Re Mills [1930] 1 Ch. 654. It means that if the donee so chooses, and even in the context of a fiduciary power, he need do nothing other than merely consider whether or not to make a distribution – he is not compelled to make any distribution at all. Even if the gift over in default of appointment is void for any reason (for example, because the subject matter of the gift over in default element of the disposition is uncertain), you will still be dealing with a power of appointment in the earlier part of the same disposition: Re Sprague (1880) 43 LT 236
• If you see the word ‘trust’ used in a formal and technical manner, then certainty of intention to create a trust will generally exist
• Otherwise, consider precatory words (words of hoping, begging, etc such as ‘in full confidence that’ or ‘in the hope that’ or ‘in the sure and certain belief that’; ‘secure in the belief that’). Does this mean that certainty of intention is lacking? If so, no trust will exist because the donee is under only a moral and not a legal obligation: Re Adams and the Kensington Vestry. But could a trust still exist in spite of the use of precatory wording as in Comiskey v Bowring Hanbury? Use all the facts you are given and look at the wording used by the settlor to argue whether, in the particular circumstances of the case, the court is likely to find the existence of a trust – that is, you must argue whether the donee is or is not likely to be under a legal obligation to carry out the settlor’s wishes. If the obligation is moral only, there is no trust
• Consider and contrast the relevant case-law authorities and apply them to the clause under consideration. Use the facts you are given to determine whether intention to create a trust is likely to be deemed present.
• Consider what will happen to the trust property in the event that you feel that intention to create a trust is present and also what will happen to the property if intention is not present. To whom will the trust property pass and why?
• Remember that if you feel that the settlor was trying to create a trust but has failed to do so because of the use of precatory wording, the disposition cannot then be saved by treating it as a power. It is either a valid trust or it is not – an invalid trust cannot be saved by treating it as a valid power: Lord Wilberforce in McPhail v Doulton. You, therefore, need at the outset to determine what the settlor was trying to do; if he was attempting to create a trust and the trust fails for any reason (lack of intention; subject matter or objects), the trust will fail and cannot be saved.

 

• Certainty of subject matter:

 

• The ‘what’ question (applies to property left in trusts; powers; and ‘gifts over in default of appointment’)
  • Linguistic/semantic uncertainty in defining what the trust property is (words such as ‘bulk’; ‘majority’; ‘most of’ are uncertain because these are incapable of one single objective meaning. They can be interpreted differently depending on the subjective views of the person reading them )
  • Potential problems caused by non-segregation of the trust property (‘4 of my cars’ raises the problem of non-segregation because which cars does the settlor mean? Note, in contrast, that the issue of non-segregation would not arise if the settlor referred instead to, ‘my 4 cars’ and only had 4 cars at the date the trust came into effect)
    • Note that the issue of non-segregation only applies to a trust or power made to take effect during the settlor’s lifetime (an inter vivos trust) where the settlor has to identify the precise assets which are to be the subject matter of the trust or power. When discussing the issue of non-segregation in the context of a lifetime trust or power, you should explain the general rule, still applicable to tangible items such as wine bottles (Re London Wine) where a lifetime trust will fail if the items are not segregated from the rest and then the exceptional position which applies to a lifetime trust/power of intangible and interchangeable items such as identical shares in a limited company which are all indistinguishable from another and where segregation is not problematic : Hunter v Moss
    • If, on the other hand, you are dealing with a trust/power made by Will (which therefore only takes effect on the settlor’s death), segregation will never be an issue because the executor/trustee automatically acquires the legal title to all the settlor’s assets and the executor is then able to marshal or allocate the items to the intended beneficiary as stipulated in the Will.

 

• The ‘which’ to whom’ question (in practical terms, only likely to affect a fixed trust)

 

• Boyce v Boyce – uncertainty of beneficial interest in the trust property cannot be resolved where the settlor stipulates the mechanism for distribution but the mechanism fails
• Re Knapton:
  • Uncertainty of beneficial interest in the trust property can be resolved on occasions where the settlor has not stipulated a mechanism for distribution – the trustee or the court is able to intervene to resolve the problem by requiring the beneficiaries to select an item or items in the order the beneficiaries are listed in the Will
  • However, it is not possible to use the Re Knapton approach where the settlor has included a mechanism that fails.
  • It is, therefore, only possible to use Re Knapton either where the settlor includes no mechanism for division or where he does include a mechanism for division of the assets and the choice of asset is made by the person who is supposed to make it

 

• IMPORTANT: It may be necessary to apply the Boyce principle and the Knapton principle to the same disposition:
  • For example, a trust of ‘my 9 cars to X, Y and Z; Z to have 3 cars as he may choose and X and Y to have 6 cars between them’.
    • Assume that the settlor only owns 9 cars at the date of his death and is therefore dealing with all the cars which he owns
    • X and Y cannot have anything until Z has made a choice and, using Boyce, the court cannot intervene if Z does not or cannot make a choice.
    • If Z does make a choice (in which case, Z will keep the cars he has chosen and if he dies after the settlor, those car will pass to Z’s estate), then X and Y can have 3 cars each from the remaining 6 cars not chosen by Z, in the order that they (X and Y) are listed in the Will (Re Knapton). They (X and Y) will take 3 cars each because ‘equity is equality’ here but only in terms of the quantity (not the quality) of items to be given to each of the 2 beneficiaries entitled to share them. In other words, the 3 cars which X receives may be far higher in value than the 3 cars which Y receives but the outcome will be governed purely by the fact that X is named first in the Will. Note that lots would only need to be drawn by X and Y if they were not named in the Will but were simply referred to by a generic description, for example, ‘my 9 cars to my brother Z and my other two brothers, Z to have 3 of the cars as he may choose and my remaining brothers to have the rest of these cars between them’.
    • However, if Z does not make a choice, X and Y will receive nothing and all 9 cars will pass back to the estate on resulting trust. In this case, the Re Knapton approach cannot be used, nor can the maxim: ‘equity is equality’. The court cannot intervene and none of the brothers will receive any of the cars.

 

• It a trust fails on the grounds of lack of certainty of beneficial interests in the trust property, an automatic resulting trust will occur

If you think, at the outset, that the settlor was trying to create a trust, remember always to deal with certainty of intention first to see whether a trust is capable of existing at all. If certainty of intention to create a trust is absent, then the proposed beneficiaries of the trust (X, Y and Z in the above example) will receive nothing and it is then necessary to determine whether the cars will pass instead to the donee (the person on whom a moral obligation only has been imposed) as an absolute gift.

Eg: Lenny makes a Will or Deed of Settlement in which Rehan is appointed as trustee and which includes the following provision (note that, as the trustee of the entire trust instrument, Rehan has an overarching duty to ensure that Fido deals with the cars below in accordance with the appropriate legal principles):

‘To Fido, my Rolls Royce car and my Porsche car in the fond hope that he will hold them for my daughters, Mabel and Iris, one of them for Mabel as she may choose and the other to Iris’ (assume that Mabel dies before making a choice).

• Stage 1: does Lenny intend to create a trust; are the words ‘in the fond hope’ sufficiently imperative to impose a legal obligation on Fido and not merely a moral obligation on him
• Stage 2: if, in the context of the entire trust instrument and the overall circumstances, you consider that the wording ‘in the fond hope’ is purely precatory such that Fido is under no legal obligation to honour the terms of the clause but is under only a moral obligation to do so, then he is not a trustee but only a potential donee of the items. As such, (and providing that the subject matter passes the first limb of the requirement of certainty of subject matter – the ‘what’ test, as in the above example), Fido is entitled to retain the items as an absolute gift. The only exception will be a situation where the donee is acting in a purely representative capacity such as a solicitor, financial advisor etc. In that event, the assets will revert to the estate by automatic resulting trust rather than passing to Fido as an absolute gift.
• Stage 3: next assume that you are able to argue that the words, ‘in the fond hope’ are not merely precatory and that a trust exists in spite of them; Fido will now become a trustee subject to a legal obligation to fulfil the terms of the trust (if the trust is otherwise valid) in relation to the cars
• Stage 4: ask whether there is any issue as to the ‘what’ aspect of subject matter: if so, the cars will never leave the estate (nothing on which the trust can bite). No problem arises in the above Fido example on the ‘what’ question
• Stage 5: next ask whether there is any issue with the ‘which to whom’ aspect of subject matter (certainty as to the beneficial interests in the trust property): if so and this cannot be resolved, then the trust will fail and the assets will revert to the estate on automatic resulting trust. This issue would prove fatal to the trust here because Mabel is dead and cannot make a choice. Where a trust fails due to lack of certainty as to the beneficial interests in the trust property, (the second limb of certainty of subject matter), under no circumstances will Fido be able to retain the items for himself because he is acting as a trustee and a trustee is never able to benefit personally from a trust (unless the trust instrument specifically authorises him to do so)
• Stage 6: if the trust has not already failed by this point (which it will have done in the above example because of lack of certainty as to the beneficial interests in the trust property), ask whether there is certainty of objects (see section below for more information on certainty of objects)? Is the class of objects defined with sufficient clarity such that there is conceptual certainty etc? Had not this trust already failed due to lack of certainty as to the beneficial interests in the trust property, the objects (beneficiaries) of the trust in the above example would themselves have been certain: ie Mabel and Iris. Do not waste words in discussing certainty of objects in any detail where the beneficiaries are clearly defined and no doubt exists as to their identity.
• Where a trust fails due to lack of certainty of objects, under no circumstances will Fido be able to retain the items for himself because he is acting as a trustee and a trustee is never able to benefit personally from a trust (unless the trust instrument specifically authorises him to do so)

A reminder:

• If a disposition fails on the ‘what question’ of subject matter due to lack of linguistic certainty (the first limb of subject matter), the property will never leave the estate. It will not pass to the beneficiaries or to the first named person because there is nothing on which the trust property is able to bite
• If a disposition fails due to lack of certainty of intention – meaning that the first named person in the disposition is not subject to a legal trust obligation but merely a moral, non-binding one – the property will pass to such first named person as an absolute donee (Fido in the above example), unless he is acting in a purely representative capacity, in which case the property will revert to the settlor or his estate by the mechanism of resulting trust
• Provided that both certainty of intention and certainty of subject matter on the ‘what’ question have been established, a resulting trust will then arise, whether the trust fails on the ‘which to whom’ question (the second limb of subject matter) or due to uncertainty of objects (the beneficiaries). In both these cases, there will be a vacuum in the beneficial interests in the trust property and equity imposes a resulting trust to address this because ‘equity hates a vacuum’. No one mentioned in the disposition will receive any of the assets referred to in it

 

• Certainty of objects (this must be discussed in the context of both trusts and powers)

 

• Decide first whether in each case you are dealing with a trust or a power of appointment (see earlier points on certainty of intention regarding how this distinction is made between them). If it is a power, is it a fiduciary power or a bare/personal power and explain why
• Apply the correct test for certainty of objects
• Explain what is meant by conceptual and evidential certainty and apply whichever of these is relevant to the disposition under discussion.
  • Conceptual certainty is needed for all trusts and powers – the definition of the class of beneficiaries must only be capable of one objective meaning
  • The need for evidential certainty varies according to the type of disposition with which you are dealing.
  • Conceptual certainty must always be dealt with first because if the description of the class of objects is not clear, it is impossible for proof to be obtained that anyone falls within that class.
  • Deal, therefore, with evidential certainty only once you are satisfied that the class is conceptually certain

 

• With a fiduciary power (a power contained in a formal trust instrument):

 

• Explain that it is a fiduciary power rather than a bare/personal power because the power is contained in a formal trust instrument and also, if applicable on the facts, because the donee of the power is the same person as the overall trustee of the Deed of Settlement. The donee will then be subject to the type of fiduciary duties described in Re Hays’s ST.
• Apply the ‘given postulant’ (individual ascertainability) test: can it said of any given individual whether he is or is not within the class of beneficiaries defined by the settlor: Re Gestetner; Re Gulbenkian
• Conceptual certainty is required: the definition of the class of beneficiaries must only be capable of one objective meaning
• But, according to Re Gulbenkian, as subsequently read in light of the approach taken to discretionary trusts in Re Baden and to both discretionary trusts and powers in Public Trustee v Butler, total evidential certainty is not needed although it will still be necessary for the actual claimant(s) to whom a distribution is made (if any) to prove that he or she is within the class specified by the donor. The key point here is that the power will not now be invalidated for a claimant who can successfully establish that he/she is within the class, just because it cannot be said of every other potential person whether or not he/she is or is not factually (evidentially) within the class.
• With a power, also consider capriciousness – is there any sensible link between the settlor and the potential appointees to whom the donee of the power may choose to make a distribution? Capricious means fanciful or whimsical. Rely on the facts of the question to support your argument. Also remember that if the class of objects is capricious, the power itself will be invalid but the assets will still be able to pass under the gift over in default of exercise of the power (provided that the gift over in default is in itself valid). You should apply the concept of capriciousness to the class of objects described in the power; you should not apply it to the person potentially entitled to benefit under the gift over in default of appointment
• Remember also that however wide the class of appointees (beneficiaries), a power will not fail on the basis of administrative unworkability (that is, because the class of objects is too wide): Re Manisty’s Settlement [1974] Ch 17, where a power was held valid even though it was for everyone in the world except some of the donor’s identified relatives

 

• If a power fails die to lack of certainty of objects (due to conceptual uncertainty and/or capriciousness and/or total lack of evidence from any of the potential appointees), or if the donee of the power decides not to exercise the power at all, the assets will revert to the settlor (donor) or the settlor’s (donor’s) estate on resulting trust unless the power contains a valid gift over in default of appointment. In such event, the assets will pass under that ‘gift over in default’ to the person or institution mentioned in it, even where such person is the same as the donee of the power. Beware, however, because if the gift over in default element of the disposition is void, for example, because the subject matter of the gift over in default is uncertain, a resulting trust will arise instead and the assets will revert to the settlor (donor) or the settlor’s (donor’s) estate on resulting trust

In relation to powers, note also that:

• A power will never fail due to lack of certainty of intention
• A power will never, in practice, fail on the ‘which to whom’ question (the second limb of subject matter) because the donee of the power will have discretion as to which of the potential beneficiaries an appointment (distribution), if any, should be made
• A power is able to fail on the first limb of subject matter (the ‘what’ question), as is a gift over in default of appointment. The subject matter of the power and the subject matter of the gift over in default should be dealt with separately: one may be certain in relation to subject matter and the other uncertain. If the gift over in default is invalid because, for example, the subject matter is uncertain, a resulting trust will arise (in circumstances where the donee of the power has not exercised the power or where the power is also void)
• A power is able to fail due to lack of certainty of the objects of the power. The two main problems here are conceptual certainty and capriciousness though additionally, in order to satisfy the limited need for evidential certainty, there must be at least one potential appointee within the class of beneficiaries who is able to supply factual proof (evidence) to establish that he/she is within the class of persons specified by the settlor (donor) of the power
• Deal separately with the objects (beneficiaries/appointees) of the power in contrast with the potential recipient under the gift over in default (rather confusingly termed a donee). If there is only one named recipient under the gift over in default element (eg if he prefers not do this, then to my mother, Mia), then certainty of objects under the gift over in default will not be a live issue, so do not waste words discussing it
• Tracing the physical whereabouts of appointees is unlikely to arise in the context of a power because the donee is under no obligation to make a distribution at all and even if he decides to make a distribution, he has no obligation to do so to every beneficiary/appointee within the class described by the settlor/donor. He will probably make a selection, in practical terms, only to those persons whom he can readily trace in a physical sense

 

• With a fixed trust:
  • Decide first why you consider that you are dealing with a purported fixed trust ie where the trustee has no discretion whether to distribute and has no discretion on either the beneficiaries to which he must make a distribution or on the share of the trust property to which each is entitled (the use of the word ‘equally’ would therefore denote a fixed trust)
  • Explain and apply the correct test for certainty of objects
  • Do not waste your time discussing the test for validity of objects in the context of a fixed trust where the purported trust is for one or more named beneficiaries eg Charles and Diane – certainty of objects is unlikely to be problematic where the beneficiaries are identified with such precision
  • Instead, explain and apply the appropriate test for certainty of objects relevant to a fixed trust only where the settlor wishes to provide for a class of beneficiaries described by a general description eg ‘£10,000 on trust equally between my cousins’
  • This is the complete list or class ascertainability test and the trustee must be able to draw up a complete list of every beneficiary in the class and must actually do so: IRC v Broadway Cottages Trust
  • Both conceptual and evidential certainty are needed to enable the trustee to do this: the trustee cannot draw up a complete list if he does not know what the words mean which the settlor has used to describe the class (conceptual uncertainty eg my old friends) or the trustee does not have sufficient proof that each of the beneficiaries satisfies the wording used by the settlor (evidential uncertainty)
  • Address the issue of conceptual certainty first – is the description of the class only capable of a single objective meaning?
  • Provided there is conceptual certainty, ensure that you then deal thoroughly with evidential certainty (ie practical proof that the beneficiaries fall in a factual sense within the class of objects described by the settlor) and use the facts you are given to consider this fully
  • Also consider the practical problem caused by beneficiaries who cannot be physically located ie where both conceptual and evidential certainty have been established but, for example, one or more of the beneficiaries have disappeared from their last known address – this does not invalidate a disposition but can cause inconvenience – briefly discuss methods of addressing this (Benjamin Order; indemnity policy; advertising under Trustee Act 1925). Do not confuse evidential certainty, as above, which must always be satisfied when dealing with a fixed trust, with the practical problems in physically locating the beneficiaries. The first will invalidate a fixed trust; the second will not.

 

• Finally, include a brief overall conclusion to your entire work

 

• Ensure that you briefly sum up the specific points which you were asked to consider in the question:
  • Which assets in the Deed of Settlement will pass into the estate and will, therefore, potentially be dealt with under the terms of the Will (this will occur where the clauses in the Deed of Settlement are void or are not carried out for whatever reason)?
  • Is the Clause in the Will valid and which assets will be disposed of under this Clause? If the Clause in the Will is invalid, the estate will then pass under the intestacy provisions contained in the Administration of Estates Act 1925 (as amended) as if the settlor had never made a Will at all. The settlor’s nearest blood relations will inherit any part of his estate which has not been previously distributed.