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HELP! TRUSTS/EQUITY question.

hi everyone. I did a TRUSTS/EQUITY question and I need help with this please. I want to know if my answer is correct.
and if not I need the correct answer please.

Question:

Maurice was a wealthy widower. In 2006, he executed the following transactions:

Maurice paid for 500 shares in Green Co Ltd and a fee simple estate in Whiteacre to be conveyed to his friend, Ian.

After the transactions were complete,

Maurice telephoned Ian and told him that the shares in Green Co Ltd and Whiteacre purchased in his name were to be held in trust for Maurice’s infant daughter, Jessie.

In 2008, Maurice was remarried to a young waitress named Charlotte.
In 2009, Maurice made a new will appointing Charlotte his executrix and the sole beneficiary of his estate.
Maurice died in 2010.

Charlotte now claims that the shares in Whiteacre, and the shares in Green Co Ltd were all held on resulting trust for Maurice when he died and therefore form part of his estate.

Advise Jessie.

My answer:

According to the situation. Maurice had completed transactions made before he made a will.
Charlotte hasn’t got a clue about the transactions Maurice previously made.

According to Fully secret trust. It is made BEFORE the will.
In the will documents are signed and witnessed but makes no mention of a trust. It “appears” that the donee in the will takes beneficially.

There must be three conditions to satisfy the enforcement of fully secret trust as stated in
Ottay v Norman , the intention of the testator to impose a binding obligation, the testator must communicate obligation to the secret trustee, the secret trustee must accept to show the term of the trust.

With regards to s.9 of the Wills Act (1837), when it comes to the validity of a will. However, secret trusts operate outside the will and do not have to comply with the formalities.

In conclusion, Jessie is entitled to 500 in shares in Green Co Ltd and the fee simple estate in Whiteacre
that is held on trust by the secret trustee Ian by way of a fully secret trust for Maurice’s daughter Jessie.

(HELP please...not sure about my answer)

Reply 1

Forum User

Bearing in mind I haven't done equity yet.... on the facts I don't see why a secret trust comes into it at all.

There would be a secret trust if Maurice said to Ian 'when I die I'm going to leave you some shares and some land in my will, I want you to hold it on Trust for Jessie', and then the provision of the will left those shares and land to Ian but without mentioning Jessie at all.

Maurice has told Ian that the property is to be held on trust for Jessie, but he hasn't left him that property in the will. He already gave it to him when he was alive and we are told that the transactions are complete. So this could be an express trust.

I think the only complication is that he transferred the property to Ian before telling him that it was to be held on trust for Jessie. If I remember rightly there is a rule 'Equity is suspicious of gifts', so there is a presumption that Ian will (at the instant the transfer goes through), hold them on resulting trust for Maurice. So the issue should be whether the subsequent oral notification that Maurice intended them to be held for Jessie is sufficient to transform the resulting trust with Maurice as beneficiary into an express trust with Jessie as beneficiary. And without knowing the answer, I would think not, because if Maurice has an equitable interest in property he can only dispose of that interest to Jessie in signed writing by s.53(1)(c) of the LPA 1925.

Reply 2

Imonster

I'm pretty certain this simply relates to Vandervell v IRC, and Vandervells (no 2). They're a little bit complex, but for once Wikipedia has a good overview of them which make things easier than reading it in the textbook or on Westlaw first.