blankspace1
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Lawschoolhack
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(Original post by blankspace1)
Hi,I have an assignment that reads

" Some years ago, Sam set up a trust of 200 shares in a catering company called Good food Outlets ltd. In 2019, he orally instructed his trustees to hold his equitable interest in these shares on trust for his brother, Keith."

This is a disposition of an equitable interest under section 53 (1) (c) of the Law of Property Act 1925. There needs to be a subsisting trust at the time of the transfer. I am not sure whether I am reading too much into it but is the first creation of the trust by Sam (Sam set up a trust in a catering company) the first trust and then the second one would be the subsisting trust? I.e: Is he disposing of his equitable title received from the company? How should I go about this?
Thank you
You are not reading too much into it. you have spotted the issue here. The central issue is whether Sam is effecting a 'disposition' within s.53(1)(c). Yes - there is a subsisting interest at the time he declares the (second) trust. Although 53(1)(c) doesn't apply to declarations of trust per se IMO he is making a disposal of his equitable interest as the beneficial interest is changing ownership by directing his trustees to hold his interest on trust for his brother.

A tricky area. I would be interested to hear what you and others think.
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blankspace1
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(Original post by Lawschoolhack)
You are not reading too much into it. you have spotted the issue here. The central issue is whether Sam is effecting a 'disposition' within s.53(1)(c). Yes - there is a subsisting interest at the time he declares the (second) trust. Although 53(1)(c) doesn't apply to declarations of trust per se IMO he is making a disposal of his equitable interest as the beneficial interest is changing ownership by directing his trustees to hold his interest on trust for his brother.

A tricky area. I would be interested to hear what you and others think.
Thank you for the help!

I've been struggling to grasp the concept a bit. However, I don't think the disposition is valid as there is no writing to prove the existence of the trust, so the equitable title will not pass to his brother. I was thinking of applying Grey v IRC but in that case, the oral instructions were followed up by the writing of some documents so there's not much Keith could do to prove the existence.
I guess they will revert back to Sam's estate.
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Lawschoolhack
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I agree.
Because you have concluded that 53(1)(c) applied you then have to see if the requirements of transfer were met. Because the instruction to the trustees was not in signed writing; there was no transfer of his beneficial interest.

Just a couple of things to think about:

#Did it 'revert back' to Sam's estate? Was there a valid transfer from Sam? i.e. did the intended trust property leave his estate in the first place?

#It's not a question of proof (leave that issue to the 'evidence' lawyers) .It's the fact that the intended disposition (gift to the brother) failed because it failed to meet the formalities required to transfer the property.

# You don't need the signed writing to prove the existence of the declaration of trust (it's personalty so an oral declaration will suffice - 53(1)(b) doesn't apply.). It's the fact that there was a failure to dispose of the beneficial interest i.e transfer the property.

Here is a short consolidation video on Formalities and Constitution. I suspect that it's not quite what you need at present; but you might be able to pick up some points from it. Click here for a link to the video.

Good luck with the assignment.
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blankspace1
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(Original post by Lawschoolhack)
I agree.
Because you have concluded that 53(1)(c) applied you then have to see if the requirements of transfer were met. Because the instruction to the trustees was not in signed writing; there was no transfer of his beneficial interest.

Just a couple of things to think about:

#Did it 'revert back' to Sam's estate? Was there a valid transfer from Sam? i.e. did the intended trust property leave his estate in the first place?

#It's not a question of proof (leave that issue to the 'evidence' lawyers) .It's the fact that the intended disposition (gift to the brother) failed because it failed to meet the formalities required to transfer the property.

# You don't need the signed writing to prove the existence of the declaration of trust (it's personalty so an oral declaration will suffice - 53(1)(b) doesn't apply.). It's the fact that there was a failure to dispose of the beneficial interest i.e transfer the property.

Here is a short consolidation video on Formalities and Constitution. I suspect that it's not quite what you need at present; but you might be able to pick up some points from it. Click here for a link to the video.

Good luck with the assignment.
Thank you for the help! I have subscribed to the youtube channel and will definitely follow along!
Have a lovely Sunday.
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