Soton Equity and Trusts - alastairhudson.com

Topic 4. THE CONSTITUTION OF TRUSTS.
Question: How is an express trust created?
General reading: Hudson, Ch.5; Martin 123-154; Pettit
100-126
Transfer of property by settlor to trustee(s) to be held on trust for beneficiaries, or
Declaration by settlor that property which settlor already holds or will receive is held by
settlor on trust for beneficiaries, or
Declaration by settlor to trustees that property which trustees hold on his/her behalf is
henceforth to be held by them for beneficiaries.
N. b. that, in each of the above cases, the settlor’s title to the property may be legal or
equitable; and that property may be subjected to a trust either by will or through inter vivos
(lifetime) transactions.
(A)
Statutory formalities applicable to the subjection of property to a trust by will:
Wills Act 1837 s. 9.
Reading: Hudson, section 5.1.1
will in writing
testator’s signature (or equivalent) shows intention to give effect to will
signature in presence of two or more co-present witnesses
who attest will or acknowledge signature in testator’s presence
(B)
Two fundamental principles
Reading: Hudson, section 5.1.2, and 5.2.4
1) Once a trust is created, it cannot be undone
Reading: Hudson, sections 5.1.2
*Paul v. Paul (1882) 20 Ch. D. 742
2) Settlor must have appropriate property rights at time of creating trust
Reading: Hudson, sections 5.2.4
Re Brooks ST [1939] 1 Ch 993
Re Ralli’s WT [1964] 1 Ch 288
(C) Exclusions from the need for formalities.
General reading: Hudson, section 5.3
a) Resulting, implied and constructive trusts require no formalities for their creation
Reading: Hudson, sections 5.3.1
LPA 1925, s. 53 (2)
Hodgson v. Marks [1971] Ch. 892 (resulting trust, oddly).
b) “Statute may not be used as an engine of fraud”: fraud and unconscionability
Reading: Hudson, sections 5.3.2
*Rochefoucauld v. Boustead [1897] 1 Ch. 196.
Bannister v. Bannister [1948] 2 All E.R. 133
Lyus v. Prowsa [1982] 1 W.L.R. 1044.
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