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Tricky problem question - imperfect gift and attempt to create trust
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Lawnerd123
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Hi
I was wondering if I could run the below past you to see your thoughts on the scenarios below
Scenario 1
A attempts to transfer land to B to hold on trust for C - A follows the correct formality to complete the transfer using an executed deed, as per s52 LPA1925.
A also attempts to create a trust - correct formality for the formation of the trust is not followed as the declaration is not signed, this being an unsigned note of intention only. Requirements are outlined in s53(1)(c) LPA
Equity will not perfect an imperfect gift (Milroy v. Lord) subject to some exceptions. The relevant exception here is Mascall v. Mascall (an extension of Re Rose), as the owner has done everything possible prior to their death to transfer this. B owns an equitable interest only as per s27 LRA02.
My question is if the trust fails, will Mascall perfect this as an imperfect gift even though a trust was initially intended? There is obiter in Milroy v. Lord by Turner LJ who said "if the settlement is intended to be effectuated by one of the modes.... the court will not give effect to it by applying another of the modes"
I think this is a wider principle before the exceptions are considered and is more focused toward imperfect gifts, but would welcome alternative views?
Scenario 2
A has an interest under a valid trust for life with B in remainder.
A dies, B does not end the trust under Saunders v. Vautier when their interest is valid (in possession). Trust is therefore still in existence when B dies. B attempted to transfer their equitable interest during their life to C. This was done verbally by instructing the trustees during a meeting.
My view is that as the attempt to transfer the interest does not follow the correct formalities, the transfer fails. However, as B had the possibility to end the trust and did not do so (as they thought they had transferred) would this interest now form part of their estate or would it be held on resulting trust for the settlor due to it offending the beneficiary principle?
The settlor has also passed meaning this would go to their next of kin.
Look forward to receiving your thoughts and apologies in advance for the long winded first post
I was wondering if I could run the below past you to see your thoughts on the scenarios below
Scenario 1
A attempts to transfer land to B to hold on trust for C - A follows the correct formality to complete the transfer using an executed deed, as per s52 LPA1925.
A also attempts to create a trust - correct formality for the formation of the trust is not followed as the declaration is not signed, this being an unsigned note of intention only. Requirements are outlined in s53(1)(c) LPA
Equity will not perfect an imperfect gift (Milroy v. Lord) subject to some exceptions. The relevant exception here is Mascall v. Mascall (an extension of Re Rose), as the owner has done everything possible prior to their death to transfer this. B owns an equitable interest only as per s27 LRA02.
My question is if the trust fails, will Mascall perfect this as an imperfect gift even though a trust was initially intended? There is obiter in Milroy v. Lord by Turner LJ who said "if the settlement is intended to be effectuated by one of the modes.... the court will not give effect to it by applying another of the modes"
I think this is a wider principle before the exceptions are considered and is more focused toward imperfect gifts, but would welcome alternative views?
Scenario 2
A has an interest under a valid trust for life with B in remainder.
A dies, B does not end the trust under Saunders v. Vautier when their interest is valid (in possession). Trust is therefore still in existence when B dies. B attempted to transfer their equitable interest during their life to C. This was done verbally by instructing the trustees during a meeting.
My view is that as the attempt to transfer the interest does not follow the correct formalities, the transfer fails. However, as B had the possibility to end the trust and did not do so (as they thought they had transferred) would this interest now form part of their estate or would it be held on resulting trust for the settlor due to it offending the beneficiary principle?
The settlor has also passed meaning this would go to their next of kin.
Look forward to receiving your thoughts and apologies in advance for the long winded first post
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hotliketea
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#2
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#2
(Original post by Lawnerd123)
Hi
I was wondering if I could run the below past you to see your thoughts on the scenarios below
Scenario 1
A attempts to transfer land to B to hold on trust for C - A follows the correct formality to complete the transfer using an executed deed, as per s52 LPA1925.
A also attempts to create a trust - correct formality for the formation of the trust is not followed as the declaration is not signed, this being an unsigned note of intention only. Requirements are outlined in s53(1)(c) LPA
Equity will not perfect an imperfect gift (Milroy v. Lord) subject to some exceptions. The relevant exception here is Mascall v. Mascall (an extension of Re Rose), as the owner has done everything possible prior to their death to transfer this. B owns an equitable interest only as per s27 LRA02.
My question is if the trust fails, will Mascall perfect this as an imperfect gift even though a trust was initially intended? There is obiter in Milroy v. Lord by Turner LJ who said "if the settlement is intended to be effectuated by one of the modes.... the court will not give effect to it by applying another of the modes"
I think this is a wider principle before the exceptions are considered and is more focused toward imperfect gifts, but would welcome alternative views?
Scenario 2
A has an interest under a valid trust for life with B in remainder.
A dies, B does not end the trust under Saunders v. Vautier when their interest is valid (in possession). Trust is therefore still in existence when B dies. B attempted to transfer their equitable interest during their life to C. This was done verbally by instructing the trustees during a meeting.
My view is that as the attempt to transfer the interest does not follow the correct formalities, the transfer fails. However, as B had the possibility to end the trust and did not do so (as they thought they had transferred) would this interest now form part of their estate or would it be held on resulting trust for the settlor due to it offending the beneficiary principle?
The settlor has also passed meaning this would go to their next of kin.
Look forward to receiving your thoughts and apologies in advance for the long winded first post
Hi
I was wondering if I could run the below past you to see your thoughts on the scenarios below
Scenario 1
A attempts to transfer land to B to hold on trust for C - A follows the correct formality to complete the transfer using an executed deed, as per s52 LPA1925.
A also attempts to create a trust - correct formality for the formation of the trust is not followed as the declaration is not signed, this being an unsigned note of intention only. Requirements are outlined in s53(1)(c) LPA
Equity will not perfect an imperfect gift (Milroy v. Lord) subject to some exceptions. The relevant exception here is Mascall v. Mascall (an extension of Re Rose), as the owner has done everything possible prior to their death to transfer this. B owns an equitable interest only as per s27 LRA02.
My question is if the trust fails, will Mascall perfect this as an imperfect gift even though a trust was initially intended? There is obiter in Milroy v. Lord by Turner LJ who said "if the settlement is intended to be effectuated by one of the modes.... the court will not give effect to it by applying another of the modes"
I think this is a wider principle before the exceptions are considered and is more focused toward imperfect gifts, but would welcome alternative views?
Scenario 2
A has an interest under a valid trust for life with B in remainder.
A dies, B does not end the trust under Saunders v. Vautier when their interest is valid (in possession). Trust is therefore still in existence when B dies. B attempted to transfer their equitable interest during their life to C. This was done verbally by instructing the trustees during a meeting.
My view is that as the attempt to transfer the interest does not follow the correct formalities, the transfer fails. However, as B had the possibility to end the trust and did not do so (as they thought they had transferred) would this interest now form part of their estate or would it be held on resulting trust for the settlor due to it offending the beneficiary principle?
The settlor has also passed meaning this would go to their next of kin.
Look forward to receiving your thoughts and apologies in advance for the long winded first post
Scenario 2: I'm not entirely sure why you think it would go on resulting trust to S for violating the beneficiary principle? B is still there - in my view it just falls to his estate. You could perhaps argue that a constructive trust arose for C, given the lack of compliance with s.53(1)(c) LPA, but that would depend on the requirements being fulfilled.
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