Equity and Trusts
Creating a trust
The three certainties: intention, subject matter and objects (Knight v Knight). Beneficiaries must be ascertainable; a fixed trust needs a complete list, a discretionary trust needs conceptual and evidential certainty. Equity will not perfect an imperfect gift (Milroy v Lord), subject to the rule in Re Rose (everything done that only the donor could do) and Strong v Bird. Constituting a trust of land requires written evidence (s 53(1)(b) LPA 1925); disposition of an equitable interest requires writing (s 53(1)(c)).
Types of trust
Express, resulting (failed or incomplete beneficial ownership - Vandervell) and constructive (unconscionability, proprietary estoppel, breach of fiduciary duty). Secret trusts operate dehors the will. Charitable trusts need a purpose within the Charities Act 2011 and public benefit; non-charitable purpose trusts fail for want of a beneficiary.
Trustees
The office is fiduciary: no conflict, no profit unless authorised, act unanimously, invest in accordance with ss 3–5 Trustee Act 2000 (standard investment criteria and advice), and distribute correctly. A trustee may be paid if authorised by the trust instrument, statute or the court.
Breach and remedies
Personal remedies include compensation and account of profits; proprietary remedies include tracing and following. Defences include consent, impounding, limitation (six years) and the protection of a bona fide purchaser for value without notice.
Worked rule: Saunders v Vautier - adult beneficiaries of full capacity, together absolutely entitled, may terminate the trust and call for the property.