Law of Equity and Trusts
1.
This instrument of the will prima facie identifies a trust of property for the benefit of the three daughters which is limited and contingent on the point in time when Jessica reaches 25 years of age at which point the three sisters can dissolve the trust if they are all of sound mind and in mutual agreeance. As there are third party trustees involved a successful transfer must have been executed which would have involved a registration of land transfer and the Land Registry offices. However, as the trust is created by will it will become incumbent upon the personal representative of Lady Penelope to carry out a correct transfer to the trustees as the property will have vested in them and bound them to the transfer. Prima facie the three certainties appear to be present and clearly identifiable. However, upon closer examination it is not possible to determine the size of the beneficial interest of each daughter nor is there any identification of what action should be taken with regards to the property once Jessica reaches 25. The court may decide that the one third of each house will belong to each daughter; however, if it can not be determined then the houses will revert to a resulting trust for the settlor’s estate.
2.
Prima facie this is an outright gift of property which is supported by clear intention to make Penelope Towers the holder of the legal estate of the home in question. The stipulation of holding the property within the family in perpetuity will translate to the requirement to maintain the home within the family for the life of Penelope Towers plus 21 years in order to abide by the rule against inalienability which rules against gifts which tend to perpetuity. As Equity will not perfect an imperfect gift and following the case of Re Brown the trust will be void as conditions operating as a complete restraint on the alienation of property are void as being contrary to public policy. This will not be the case if it can be clarified that by stating ‘in perpetuity’, Lady Penelope was aware that the period would end 21 years after the death of Penelope Towers and her intention is still clear. Otherwise the gift will be void and revert to a resulting trust for the settlor’s estate.
3.
Although technical words are not necessary it appears that in her haste Lady Penelope has confused the chattels to which she is referring. The gift/trust could be invalid as the property must be identified as relative terms will not do. The bio data which has been provided stipulates that the jewellery and antiques collection are two separate bodies of chattels. In this extract from the will she is making it appear as though the collection of antiques includes the jewellery and therefore, Emma will have a choice in which pieces she would like from both sets of objects so long as the jewellery she chooses is also an antique of some nature. Also we are unaware if her children are still alive therefore, assuming that they are the court could be likely to construe that jewellery and antiques are held on trust by Emma for Amy and Jessica providing they are still alive when she dies. The collection of antiques has been vested to Emma for her lifetime to choose which pieces she desires. However, a problem will arise if Emma dies without having chosen the pieces she wishes. In this case the trust will fail for uncertainty and the entire collection will be held on resulting trust and revert to the estate of Lady Penelope. If she survives, then after she has chosen her pieces she will have to transfer the remaining pieces to Amy and Jessica. Unfortunately, in this situation another problem arises because it can be assumed that discretion is to be Emma’s as to who receives which pieces, but this is not stipulated which means uncertainty of subject matter with regards to lack of certainty as per the size of each beneficiary’s share is likely to deem this trust void. Therefore, prima facie, Emma will be able to choose the pieces she would like and the remainder will revert to the settlor’s estate on resulting trust. It should be noted that Emma may choose to keep all the antiques and she is legally entitled to do so.
4.
Although the actual word trust has not been used, this is a discretionary trust which will vest in the grandchildren of Lady Penelope upon the youngest child’s eighteenth birthday. Even though Charles was not born at the time of her death, the trust will not vest until the contingency is met which in this case is when the youngest reaches eighteen years of age. Therefore, the grandchildren that are alive at her death or who are born thereafter will have a vested postponed interest in a share of the money which has accrued in the bank account which will have been held on trust. However, there may be no trust in this instance as Lady Penelope has once again incompletely constituted the trust in regards to the size of the beneficial interest that is to be given to each grandchild. It is unlikely from what has been stated that the court will be able to apply this trust as the settlor has not provided an effective method of determining the size of each beneficiary’s share. Also, the requirements in Strong v Bird will not be met as the grandchildren will not become personal representatives thus the property will not vest in the donees.
5.
Keeping in mind that in instrument number three we assumed that Emma was merely entitled to the antiques, this instruction will prima facie create a gift and a charitable purpose trust. Firstly, the gift of the jewellery to Emily is clear and precise thus making it a valid gift. Whatever she does not wish to keep will revert to a purpose trust which will require the trustees to sell the pieces and then hold the income on trust for the children of the school. By following the rules of Re Denley Trusts the trust having been expressed as a purpose directly for the benefit of individuals which are ascertainable, the trust is valid and enforceable. The only doubt that could be foreseen is if there is more than one special needs school in the Village of Little Compton.
6.
This element of the will is very straightforward in creating a simple express trust of property for Jessica of which she is vested, immediate and absolutely entitled to if she fulfils the legal requirements. We are unsure how old Jessica is however, upon her eighteenth birthday, if she is of sound mind and willing she can assume legal ownership of the “Lodge” and dissolve the trust. She may call for a conveyance of the legal estate at anytime and the trustees must comply if she is legally entitled to do so. Until then the trustees will be vested with the legal estate and will have the power of sale even though this is a bare trust (at least it is if she is an adult) under section 1(2) of the Trust of Land and Appointment of Trustees Act 1996. Unless the “Lodge” is not a clearly discernable piece of land or property in Lady Penelope’s portfolio, the three certainties of a trust are present and Jessica should have the legal estate transferred to her without delay.
7.
This will instrument is a clear and precise outright gift of chose in action which will require the personal representative of Lady Penelope to transfer the shares of her company into four equal portions, one for each child. The certainties are present and her intention could be no clearer. Therefore, the personal representative will have to identify whether or not the shares are registered in the CREST system. If they are not he will have to deliver a signed stock transfer form and share certificates to the beneficiaries and they will have to apply to the company to register the transfer. The beneficiaries will not become legal owners of the shares until they are registered as the new owner and have been issued with new share certificates. However, if the company is in the CREST system the transfer will be done electronically and legal title will pass on when registered. There is no need for transfer forms or share certificates.
8.
Prima facie it should be noted that the trust created for her daughters of all her houses can still operate as the instructions still direct the trustees to hold the remaining property on trust, which could be implying they be held on trust until the youngest reaches 25. After making the gift of the cottage the PA chooses, the remaining properties will be held on trust and it is assumed will remain on trust until the youngest daughter is 25 whereby the trust will vest, unless she dies then the remaining daughters will be able to dissolve the trust if they meet the Saunders Criteria . If it is held that the discretionary trust is effective then the trustees would have to draw up a list of suitable buyers using the ‘given postulant test’ which would make it sufficient to say with certainty that any given individual is or is not a member of the specified class. However, the trust may still fail if the definition of objects, although not actually unclear, is administratively unworkable or is “so hopelessly wide that it does not form anything like a class.”
9.
Angela will not only be the sole beneficiary of the outright gift of her mother’s residuary estate, she will also be the beneficiary of the resulting trusts of any of the other instruments in her mother’s will that have failed and reverted back to the settlor’s estate. This gift has been made outright and all certainties are present. As beneficiary of the residuary estate, Angela will receive what is left after all debts and expenses have been deducted. Also she will have to wait to benefit from the gift until she is of sound mind and eighteen if she is not already so as no minor is entitled to hold the legal estate of a property until the age of eighteen. Lastly, any outstanding court cases regarding any property within her mother’s will which is still under debate or being challenged will have to remain untouched until the courts decide as she will not be the legal owner until it has been decided in the courts that a resulting trust is in effect. However, modern thought on the subject of resulting trusts has deemed that if there exists a lack of intention to benefit the beneficiary is at the core of the imposition by the court of the resulting trust, then the resulting trust should be made capable of extending to the transfer of the settlor’s property if the intention is vitiated by mistake, duress or under undue influence.
BIBLIOGRAPHY
HAYTON, D.J. (1998) The Law of Trusts 3rd Edition London: Sweet & Maxwell
MARTIN, J.E. (2001) Hanbury & Martin Modern Equity 16th Edition London: Sweet & Maxwell Ltd.
PEARCE, R. AND STEVENS, J. (2002) The Law f Trusts and Equitable Obligations 3rd Edition London: Butterworths.
WHICH? BOOKS (2001) Wills and Probate London: The Penguin Group
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