LAW6092 Equity & Trusts: A Comprehensive Guide Sample

Introduction : LAW6092 Equity & Trusts

The Three Certainties and the idea of Non-Charitable Purpose Trusts are crucial concepts in the field of trust law that influence whether or not a trust is legitimate. The famous decision of Knight v. Knight (1840), which laid the groundwork for the Three Certainties sure of intention, certainty of subject matter, and certainty of objects developed these ideas considerably. These guarantees, which guarantee that the settlor's intentions are precisely stated and legally enforceable, are necessary for the establishment and execution of trusts.

It is essential to evaluate each phrase in the context of Jaspal's will in light of these guidelines in order to ascertain its legality because it specifies particular dispositions to different beneficiaries. The will covers various trusts, including ones for family members and possibly non-charitable purposes like caring for an animal. We can evaluate Jaspal's desired dispositions' efficacy and legality by adopting the guidelines outlined in Knight v. Knight and later judicial decisions.

Issue

The main question in Jaspal's will case is whether the trust dispositions it includes are legitimate. The Three Certainties of intention, certainty of subject matter, and certainty of objects that were established in Knight v. Knight must be the basis for this approach. Examining each disposition to Rashid, Oscar, and Holly is necessary to determine whether these requirements are satisfied . For Rashid, the question is whether the will makes it clear that he is to keep Amazon shares in trust for Jaspal's siblings, Pamela and Edward, as well as Kelly. Oscar is questioning if Jaspal truly intended to share the money from the trophy sale with his coworkers, especially in light of the possible ambiguity surrounding their identities. A special challenge is presented by Holly's disposition, which is the establishment of a non-charitable purpose trust for Sprinkles the cat's benefit. An important part of this issue is whether or not such a trust is enforceable and lawful, as opposed to conventional beneficiary trusts. The results of this study will establish the identified parties' rights and obligations as well as the legal efficacy of Jaspal's will.

Rule

In the UK, the concept of a charity is divided into two categories under Section 1(1) of the Charities Act 2011. This definition is essential for figuring out which organisations are eligible for the benefits and obligations that come with being legally recognised as a charity. In accordance with the rulings in Morice v. Bishop of Durham [1804], Jaspal's will's dispositions do not create charitable trusts. Similar to the trust in Morice v. Bishop of Durham, which was declared invalid for its non-exclusive charitable nature, the trust for Rashid, which is meant for particular family members, and the trust for Oscar, which benefits a defined number of colleagues, do not have the public aspect necessary for a charitable trust. The Charity Commission for England and Wales v. Framjee [2014] case brings to light a number of important areas of governance and charity law. It emphasises how proactive the Charity Commission is in monitoring and guaranteeing the correct management of charitable organisations. Concerns over the Dove Trust's, an unincorporated charity, handling of public donations gave rise to the litigation and Mr. Framjee's appointment as temporary manager.

Certainty of Intention (COI)

The court accepted a trust in Paul v. Constance (1977) even though there was no formal trust language. In this case, there was a man who kept saying that his partner owned just as much money as he did in his bank account. The court found that this consistent vocal affirmation was sufficient to prove a purpose to create trust demonstrating that verbal comments and behaviour alone may not always be sufficient to establish a case of conflict of interest.

On the contrary, Re Kayford Ltd (1975) dealt with a business setting in which a company that was having financial problems moved money into a different account that was marked 'in trust' for its clients. Because the business made it obvious that it planned to keep the assets separate for its clients, the court determined that a trust had been established and that the COI requirement had been met .

In Jones v. Lock (1865) COI was judged to be deficient. In one case, a father gave his infant son a cheque that was intended for the child's future. However because there was no explicit desire to establish a trust, the court determined that this did not qualify as one. This example shows that trust cannot be established by wishes or plans for the future alone. Overall, the uncertainty in the will's terms caused it to be interpreted as an absolute gift rather than a trust in Lambe v. Eames (1871). The court considered this to be an outright gift rather than the obvious intent required for a trust.

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Certainty of Subject Matter

It is crucial to make sure that the beneficiaries' shares and the trust property are both precisely identified and described when applying the principle of Certainty of Subject Matter (CSM) to Jaspal's will. Trust assets and beneficiary entitlements must be precisely defined, as demonstrated by the instances of Palmer v. Simmonds (1854) and Boyce v. Boyce (1849) . Palmer v. Simmonds established the need for clarity in trust documentation by ruling that the phrase "bulk of my estate" was too general. Instead of leaving room for interpretation as was the case in Palmer v. Simmonds, Jaspal's will outlines the trust assets (such as Amazon shares, a trophy, and the residuary estate) in explicit terms. Moreover, the word "equally" implies a fixed trust in which each beneficiary's part is known and determinable, which is consistent with the clarity demanded by decisions such as Boyce v. Boyce. Furthermore, Jaspal's will makes no mention of the assets such as the £10,000 not existing, which is by Re Lind (1915), which states that the trust property must exist. For a trust to be legitimate, this existence assumption is essential. With its distinguishable assets and precisely stated beneficiary shares both necessary for the trust to be executed following Jaspal's intentions the will seems to meet the CSM requirements overall.

Certainty of Objects

By utilising the standards of complete list, conceptual certainty, and evidential certainty, we may apply the Certainty of Objects (CoO) to Jaspal's will and validate the validity of the trust. Jaspal's will can produce a complete list of beneficiaries, which is necessary for the essential list test as stated in IRC v. Broadway Cottages Trust . This condition is satisfied by the easily identifiable beneficiaries, such as Rashid, Oscar, Holly, Edward, Kelly, and possibly Pamela. The terminology employed to characterise the beneficiaries are defined conceptually. Even if the phrase "my closest colleagues" may sound vague at first, Phyllis's ability to compile a list helps to satisfy the criteria for conceptual certainty. This is similar to the clarity that can be found in phrases like "family" or "nieces," as confirmed in the Re Barlow case. Finally, there is also evidential clarity on the practical identification of beneficiaries. The identities of Edward, Kelly, and Pamela may be readily determined by family records, and the identities of the "closest colleagues" can be made clear by Phyllis's list. The trust in Jaspal's will is a legitimate fixed trust since it satisfies these requirements and the beneficiaries have a stake in the trust's assets.

Application

COI

Disposition to Rashid

However, unlike Re Kayford Ltd., where the goal was made clear, Jaspal's language may need to be carefully interpreted to make certain that it is more than just a wish.

Disposition to Oscar

This is similar to the clarity observed in Re Kayford Ltd., where the business made it apparent that it intended to establish a trust. Jaspal's directive to sell the trophy and give his colleagues the proceeds makes it evident that he wants to build trust.

Disposition to Holly

It is important to look closely at the phrase "to be used to provide for my cat, Sprinkles" to see if it expresses a definite desire to establish trust or is just a wish. This case highlights the intricacies of non-charitable purpose trusts, which necessitate a distinct motive in order to be legitimate.

Certainty of Subject Matter

Disposition to Rashid

I am donating Rashid "all my shares in Amazon." The description of the shares satisfies the CSM criterion since it is clear and distinct, in contrast to the vague term "the bulk of my estate" in Palmer v. Simmonds.

Disposition to Oscar

The topic, which is Jaspal's most valued trophy, is distinct and well-known. Unlike Palmer v. Simmonds, there is no doubt that the prize is a real, tactile object. In line with the clarity found in Boyce v. Boyce, the directive to sell the trophy and divide earnings equally among colleagues offers precise direction on beneficiary entitlements.

Disposition to Holly

The term "residuary estate" refers to the portion of the estate left over after specified bequests have been made, and it is a widely used and recognised concept in wills and trusts. This complies with the need for a distinct subject matter and avoids problems similar to those in Re Lind, where the existence of the trust property is required.

Certainty of Objects

Disposition to Rashid

Jaspal's two children, Edward and Kelly and his sister Pamela are the beneficiaries. The children's CO is satisfied as they are named specifically. As is typical in trust law, Pamela's benefit is focused on the revenue produced; this does not lessen the likelihood that she will receive the money. The question of the Certainty of Objects arises when examining the disposition to Rashid in that Jaspal leaves shares in Amazon for the benefit of his children, Edward and Kelly . Hence, free-to-spend language allows Rashid to decide how to use the shares for the benefit of the children. In addition, the task is to specify the beneficiaries' class, which is the children, and make sure the trust agreement gives Rashid enough leeway to use his judgement without leaving the class in the dark. It is necessary to carefully examine if the trust instrument offers determinable standards or criteria to identify the beneficiaries.

Disposition to Oscar

The recipients are "closest colleagues" of Jaspal. This phrase could give rise to confusion. However, Jaspal says that his helper, Phyllis, can make a list that should clear up any misunderstandings. This is comparable to the notion of administrative unascertained beneficiaries, which states that a class of beneficiaries may still meet the CO if they may be ascertained by another party. This depends on Phyllis being able to recognise these coworkers.As per Jaspal's will, Oscar will inherit her most valuable trophy, and her closest associates will split the proceeds from its sale. The problem that emerges has to do with figuring out who these "closest colleagues" are and making sure that there is enough confidence in the trust. Determining whether the trust instrument offers precise and determinable standards for defining the beneficiary group is the difficult part.

Disposition to Holly

This disposition presents a special difficulty. However, many legal systems recognise that trusts for the care of pets are an exception. In this case, Sprinkles' care indirectly serves as the "object," which is a non-charitable purpose trust. Holly for the upkeep of Jaspal's cat, Sprinkles, raises a possible question about the Certainty of Objects. It becomes essential to set precise standards for identifying the beneficiary the pet in order to guarantee adherence to trust law principles. As a result, the case study forces a thorough examination of the Certainty of Objects in each disposition taking into account the terminology employed, the standards for identification and any difficulties that might result from the trust provisions' discretionary elements.

Conclusion

In conclusion, a complex legal environment is revealed by evaluating Jaspal's has been in light of the three Certainties and Non-Charitable Purpose Trusts. The transfer to Rashid that involves Amazon shares for the benefit of Jaspal's kids, treads carefully when it comes to discretion and certainty. Furthermore, the language allows Rashid to use his judgment when it comes to using the shares for the benefit of the children. Hence, the difficulty is making sure the trust instrument has enough criteria to support this judgement without making the beneficiaries' class unclear.

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