#6575 - What Is A Trust - Trusts

What is a Trust ......................................................................................................................... 3 Intention ............................................................................................................................. 5 Subject Matter .................................................................................................................... 7 Objects ................................................................................................................................ 9 Trusts and Other Legal Relationships ............................................................................ 11 Creating a Trust ..................................................................................................................... 13 Express Trust ................................................................................................................... 14 Settlor has done everything necessary........................................................................... 15 Settlor has not done everything necessary..................................................................... 17 Trustees .................................................................................................................................. 19 Trusts and Powers ........................................................................................................... 20 Duties of a Trustee ........................................................................................................... 25 Breach of Trust ....................................................................................................................... 31 Breach ............................................................................................................................... 32 Who can Sue? ................................................................................................................... 33 Remedies ........................................................................................................................... 34 Defences. ........................................................................................................................... 39 Charitable Trusts ................................................................................................................... 40 Business Trusts ...................................................................................................................... 46 Investment Trusts .................................................................................................................. 54 Resulting Trusts ..................................................................................................................... 61 Automatic Resulting Trusts ........................................................................................... 63 Quistclose Trusts.. ........................................................................................................... 66 Constructive Trusts ............................................................................................................... 71 Remedial Constructive Trusts ........................................................................................ 74 Institutional Constructive Trusts and Trustees ............................................................. 76 Third Party Liability ......................................................................................................... 77 TRUSTS | PAGE 2 WHAT IS A TRUST? TRUSTS | PAGE 3 TRUSTS A trust is where the propriety rights are held by one person on behalf of another. Settlor Trustee Beneficiary Person creating the trust Person holding the rights Person for whom the rights The trustee has legal are held ownership of the property Created inter vivos, (while Fiduciary obligations: Rights in rem, or in alive), or post mortem (in a - no conflict/no personam. will). profit - duty to invest trust property - impartially act between beneficiaries - act personally - duty to account * Trusts must be intentionally created o Defines the rights, duties, powers and obligations of the trustee in respect of the trust property o Inferred from the facts SS? Bahr v Nicolay o Three Certainties must be met SS? Certainty of intention SS? Certainty of the trust property SS? Certainty of objects * Types of trusts o Fixed SS? Beneficiary can enforce both the administration and distribution of trust property o Discretionary SS? Beneficiaries have no enforceable claim to distribution of trust property * Mere power SS? It is at the trustee's discretion o Resulting (implied) SS? The settlor intended to create a trust but either failed to complete the formalities or the intention to create is not rebutted o Constructive SS? The court imposes a trust where it would be a fraud for a person to assert beneficial ownership * Express trusts are created in two ways: o By declaration SS? Declaration of trust where the settlor declares himself to hold property on trust for a beneficiary o By transfer SS? Transfer of property + intention for the transferee to be the beneficial owner TRUSTS | PAGE 4