hiya, ive got a problem equity question to hand in on friday ant im struggling on how to structure my answer and what principles to include. the question is:
“(a) I leave £500,000 to my dear sister, Margit, trusting that she will do what is right either in her lifetime or by her will for the benefit of my nephews, Simon and Lawrence
(b) I leave my house and its contents to my brother, George, in full confidence that he will allow my friends to choose a case of wine to remember me by from the extensive stock in my cellar;
(c) I leave the residue of my estate on trust to Jane and Emma which they should distribute at their discretion amongst the regulars at my bingo club; if there is any doubt as to who should receive a benefit, my trustees Jane and Emma, and my sister Margit should decide.”
Jane and Emma have been appointed as Executrixes under the Will and they seek your advice as to how they should distribute the property.
so far ive noted that a) fixed trust but with precatory words, so goes to margit absolutely
b) gift subject to condition precedent
c) discretionary trust
im not sure if this is right though. any help or giudence will be MUCH appreciated
EQUITY problem question help pls :) Watch
- Thread Starter
- 14-12-2010 14:42
- 15-12-2010 00:04
Broadly yes, but be careful about jumping to conclusions
(a) isn't quite a paradism example of precaratory words. The way I read it, the "for the benefit of my newphews" is stronger than the nonsense about "doing right". Its arguable that the "doing right" bit should be ignored but "for the benefit of my newphews" creates a discretionary trust in favour of the newphews
Doesn't really matter but (a) is (potentially) a discretionary trust not a fixed trust - its only a fixed trust where the proportions to be given to each beneficiary are fixed - e.g. "give £10 to X and £20 to Y", the trustee can't have discretion in a fixed trust
(b) "in full confidence" doesn't really suggest a condition for me. Is a trust in favour of the friends intended? If so, is there certainty of subject matter?
(c) yes but that's not really the point, issue is certainty of objects
You should structure these questions by going through each of the three certainties and (if relevant) constitution and formalities in the case of each potential trust. The question you posted is straightforward as one of the certainties is problematic in each case (might be relevant to the certainties test though, certainly in the case of certainty of objects)
Identifying whether a trust is fixed or discretionary or whatever is nice but isn't really the point of the question
- 16-12-2010 03:00
Not sure if I agree with Jacketpotato on a). I think that he's right in calling the "doing right" part nonsense- but nonsense is not put into an exam question to be ignored. In this case it looks to me like the examiner has intentionally made in unclear what trust property is to pass if there is a trust for the nephews.
The testament does not say that Margit is to pass the £500k on to them- nor is she to leave it to them. She is to "do right" by them, with no means of measuring what exactly doing right is. Any trust in favour of the nephews fails for uncertainty of trust property.
I agree with Jacket on b)- there's no certainty of beneficiary here, and I'm also not convinced that "in full confidence" necessarily implies intention to create a trust.
c) Discretionary trust seems about right- but certainty of beneficiary is also problematic. Note that this problem is to be solved by looking at trustees' discretion or lack thereof to choose beneficiaries, as well as the power of appointment in favour of Margit.