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Equity & Trusts: Trust/ Power/ 3 certainties

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    Hi there,


    - I appreciate that as a result of 'in default of appointment' the distribution of the proceeds of the residue is indeed a power. My question is 'the residue of my estate I command Y to sell' - is this a trust? If so is Y the beneficiary as well as the trustee?! And a disposition can have both a trust and a power within it?!

    Or do I have this completely wrong and is the whole disposition a power - if what is the relevance of the word 'command'?

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    Second question is, if you have a power is the three certainties test similarly applied?

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    Third question, is the first certainty (certainty of intention) intertwined with the necessity to find whether the disposition in question is a trust or a power?
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    As I said, anyone that can offer me any guidance, especially in relation to the first question, will make my day!

    xx
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    1) Whether this is an intended trust or a power or a gift is an open question

    You are right to point out that the word "command" implies a trust as it implies that Y has an obligation to do as suggested. On the other hand, the words "in default of appointment" suggest that Y has an option to do whatever the hell he likes. The phrasing is clearly contradictory and either interpretation is possible. You need to explain what indicates that one option will be chosen why another and should try to think about which interpretation you think a court would be most likely to follow and why (it may well be finely balanced).


    2) The tests differ. Certainty of objects, in particular, is weaker, I think the case is Re Gulbenkian (I could be totally wrong). Penner's Core Text Series book is very very good on this and explains it very clearly and concisely.

    3) That is EXACTLY what certainty of intention is. Certainty of intention isn't an abstract concept, it is a factual question of whether a trust is actually what the setllor intended or whether he intended a gift or a power or something else.
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    Thank you so much Jacketpotato! I actually have ordered the Penner textbook (after reading an older addition in the library yesterday - I agree VERY helpful book, a lot better than my current textbook and I wish I'd met it earlier! Unfortunately Amazon are going to take an age to deliver it!

    Also, just another addition to my question. Do you think it is necessary to question all the three certainties when discussing each disposition or just the relevant certainties which are contentious? Also, I aprreciate to get a first I am going to have to put in some critical analysis - a. how do you do this in relation to a problem question and b. any books you would recommend for this.

    Also (sorry) if I explain the three certainties test in quite some detail at the beginning of my essay (before i go into looking at each disposition) I won't have to explain them in any great detail again will I?

    Thanks again
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    (Original post by jacketpotato)
    1) Whether this is an intended trust or a power or a gift is an open question

    You are right to point out that the word "command" implies a trust as it implies that Y has an obligation to do as suggested. On the other hand, the words "in default of appointment" suggest that Y has an option to do whatever the hell he likes. The phrasing is clearly contradictory and either interpretation is possible. You need to explain what indicates that one option will be chosen why another and should try to think about which interpretation you think a court would be most likely to follow and why (it may well be finely balanced).


    2) The tests differ. Certainty of objects, in particular, is weaker, I think the case is Re Gulbenkian (I could be totally wrong). Penner's Core Text Series book is very very good on this and explains it very clearly and concisely.

    3) That is EXACTLY what certainty of intention is. Certainty of intention isn't an abstract concept, it is a factual question of whether a trust is actually what the setllor intended or whether he intended a gift or a power or something else.
    ...
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    (Original post by lol2003)
    Sorry to be an absolute pain. Another small problem has arisen. Is it such that if a trust fails due to uncertainty of words it become a power of appointment.

    So here:
    ‘I leave £1,000,000 to X (trustee) with the clear belief that he will apply the fund to such of my friends, as X in the exercise of his absolute discretion should think fit.’

    Here there is an obvious dispute between whether this is a discretionary trust or power of appointment. Right? If i decide that the words 'the clear belief that he will 'do not impose a trust, does this automatically make the disposition a power of appointment?
    No not necessarily

    If the particular words are clearly either a trust or a power then its one or another

    But there is nothing to say that something has to be a power if its not a trust. Normally if a trust fails for lack of certainty, the property will be gifted or will be held for the settlor/settlor's estate under a resulting trust (as appropriate).

    (Original post by lol2003)
    Thank you so much Jacketpotato! I actually have ordered the Penner textbook (after reading an older addition in the library yesterday - I agree VERY helpful book, a lot better than my current textbook and I wish I'd met it earlier! Unfortunately Amazon are going to take an age to deliver it!

    Also, just another addition to my question. Do you think it is necessary to question all the three certainties when discussing each disposition or just the relevant certainties which are contentious? Also, I aprreciate to get a first I am going to have to put in some critical analysis - a. how do you do this in relation to a problem question and b. any books you would recommend for this.

    Also (sorry) if I explain the three certainties test in quite some detail at the beginning of my essay (before i go into looking at each disposition) I won't have to explain them in any great detail again will I?

    Thanks again
    Is usually worth mentioning them (If its really obvious just say "there is certainty of subject matter" and leave it at that, no need to outline the test or anything), don't just ignore them and beware of jumping to conclusions. Its very easy to think "well this part of the question is obviously about certainty of objects" and miss an important certainty of subject matter point. Obviously concentrate on the contentious ones though.

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