This is an extract of our Completely And Incompletely Constituted Trusts document, which we sell as part of our Trusts Notes collection written by the top tier of Monash University students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Trusts Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Completely and Incompletely Constituted Trusts?For a trust to be valid, trust property must be vested in the trustee (it must be assignable) - This is the question of whether the trust has been completely constituted o In trusts by declaration there is typically no issue of CC Paul v Constance o Usually arises in relation to trusts by transfer
? The rules governing gifts will determine whether the trust property has vested in the trustee. It will be sufficient if the property has passed to the trustee in equity If the trust is not completely constituted, it will fail. A failed gift will not be interpreted as a declaration of trust o A trust cannot be complete until the trustee has title to the relevant property and can hold it subject to the trust which has been declared There are four main exceptions to the rule that incompletely constituted trusts are unenforceable o An imperfect transfer may be enforceable where the transferee can show a representation by the transferor that was intended to be relied on and was relied on to the transferee's detriment o Under the rule in Strong v Bird, if a testator intends to make a gift but does not make a complete gift before their death and appoints the donee his executor, then equity will assist the done o Gifts in contemplation of death o An incompletely constituted trust can be enforced pursuant to a promise to create a trust to a person who has provided consideration
Complete or Incomplete?
? If a trust is properly constituted: o Property in the asset has passed. If there is a completed legal assignment, the transferee takes title. If the assignment is complete in equity, the assignment will be enforced against the transferor in equity. o This property can now form the subject matter of a trust, but remember to check whether s 53 (1) applies/has been complied with.
? If a trust is not constituted o There is no trust - title remains with settlors o However constitution is not a problem when there is consideration
? If I give you consideration for transferring property to me to hold onto trust and something goes wrong in the legal transfer mechanism, it won't matter as the receipt of considerations will bind the assignor's conscience. Once they have it in their hands, equity requires done what ought to be done and will require the assignor as holding it on constructive trust
1. Assignments of legal property for value
? Equitable title arises
? Assignor will hold on CT for assignee
2. Voluntary assignments of legal property
? ?? ? Has the property been assigned at law? (if yes, trust constituted) o Torrens Land
? Registration TLA s 40 signed by both transferee and transferor, lodged with the DCT
? If no registration, apply Corin v Patton
Buy the full version of these notes or essay plans and more in our Trusts Notes.