Tangible and Intangible Property Management

A trust is a relationship whereby one person for the benefit of another manages property, including tangible and intangible. A trust is created by a settlor, who entrusts all or some of their property to people of their choice identified as trustees. The trustee holds legal title to the trust property (or trust), legally they are obliged to hold the property for the benefit of one or more individuals generally specified by the settlor, who hold equitable title [1]. The trustees owe a duty to the beneficiaries, who are beneficial owners of the trust property [2]. A trust entail three certainties [3] as determined in Knight v Knight, which are, having clear intention to create a trust [4]. The property subject to the trust must be evidently acknowledged [5] . The beneficiaries of the trust must be clearly identified, or be ascertainable [6]. A trust can be created by the expressed intention of the settlor, known as an express trust. If the settlor has not expressed himself clearly the court will make a decision if a trust was intended, Paul v Constance [7]. The equitable maxim [8] , applied. The Court consequently found from Mr Constance’s words and conduct proposed a trust.

Johura has created an express trust firstly a fixed trust and secondly a discretionary trust. In a discretionary trust, trustees have power to decide who the beneficiaries will be; the settlor must have illustrateed a clear class of beneficiaries [9]. Certainty of Objects test is [10]. It ought to be possible to say with certainty if a particular person is a beneficiary.

Timpsons v Yerbury [11]  states that there are four ways to give a beneficial interest to another [12] . If she wants to remove herself from her interest she must complete the formalities of s52 LPA [13] . If it’s not in writing it is invalid and therefore the transfer fails.

Since Milroy v Lord [14] , courts have appealed to say that although legal title to trust property remains vested in the settlor, efforts by the settlor to the trustee might be successful. This might be the case where the settlor has done everything in his power to part himself from the trust property, Re Kayford [15]. Where it’s likely for a trust to be formed. The LPA 1925 s 53(1)(b) provides that [16]. Written declaration is not necessary, like Bannister v Bannister [17]. Thus, the lady could not be evicted. In the case of Rochefoucold v Boustead [18], the COA held that an oral declaration could be allowed, based on the equitable maxim.

Johura would need to complete a deed under s52. Re Rose [19]  states that if the settlor has made every effort to transfer the property then that will be sufficient. As in Pennington v Waine [20] where it was held it would be unconscionable for the courts to reject that Johura wanted Faisel to have the property. It would appear that he is happy to have the cottage, because he actually needs it.

Strong v Bird [21] would apply if Faisel was her executor and Johura planned to make a gift, which continued until death. It could be perfected by a donatio mortis causa [22] if she makes the gift in thought of immediate death. In Cain v Moon [23] three conditions must exist for a DMC to be valid. Equity will enforce a gift made by a person [24]. She instructed Peter to hand the deeds to Faisel, which showed that she had to intentions of gifting him the cottage. The DMC shall pass on this occasion, if Johura had not died then the deeds would be handed back to her as the property is likely be registered in her name at Land Registry. Most likely Faisel will get the house on the basis of DMC. Johura would need to have complied with the Stock Transfer Act 1963 if she wished to transfer any shares to any member of her family [25]. If Johura had completed the stock transfer form then the shares can be transferred to Faisel, however if this is not the case then it will fall back into residue of the estate. In Re Rose [26], the donor had done everything in his power to transfer the legal title, and no more could be expected of him. The Court ruled that the transfer was effective therefore the gift was valid, and the dividend belonged to the recipient, despite not being the legal owner of the shares. In comparison Milroy v Lord [27], Milroy did not in fact transfer the shares to Lord, but only gave Lord power to dispense the dividends, therefore the gift was incomplete. The trust was not valid as he kept the shares, which he intended to transfer. Hence, the decisions will depend on whether Johura has complied with the Stock Transfer Act [28].

In Sen v. Headley [29], Nourse LJ states [30]. Vital feature of donatio, there must be some act of handling over the goods to the trustee or has been given access to it as in Woodard v Woodard [31]. No evidence of both sets of keys was handed to the son. If Johura has handed one set of keys and not mentioned about the other set of keys this will fail, however if both sets of keys are handed over then it would probably be successful within DMC in this instance it’s not clear and therefore more questions need to be asked.

Parting with the dominion of the subject matter to the donee is vital. Delivery of the subject matter of the gift means access to it. Simple words are not enough. In Re Lillingston [32], handing over of the keys of the trunk deposited with jewellery to the donee amounted to delivery. Setting aside property instead of handing straight to the donees is not delivery Bunn v Markham [33].

Johura’s father has no existing property with which to constitute a trust. Courts have held future property or expectancies cannot form the subject matter of a trust Re Ellenborough [34]. Therefore Johura will probably not receive royalties.

The Wills Act 1837 provides [35] . The act expands to all gifts or testamentary dispositions where an individual makes a disposition of his property to take effect after his death.

If section 9 of the Wills Act is not complete the Will is invalid and the deceased’s estate will be distributed [36] under Intestacy. The will must be in writing and signed by the testator. Two witnesses should confirm the testator’s signature and to the correct execution of the will [37] . The testator must know and approve the contents of the will. The testator must have testamentary capacity. Legal test for assessing whether a particular testator has testamentary capacity Banks v Goodfellows [38] . More recently in Re Estate [39] the will was declared invalid and revoked, as the man was not in full mental capacity.

Precutory words such as confidence may or may not form a trust. Courts consider words used by the settlor. In Adams and Kensington Vestry [40] , the will and surroundings were unclear that no trust could have been intended by the precutory words used by the testator [41] . Similarly in Jones v Lock [42] , the court held there was no trust for the son even if there was an intention to make a gift. A gift had not been made and therefore a trust could not be implied. Courts will look to the intent and not to the form; precutory words used by testators have arisen problems. In contrast, in Comiskey and Others v Bowring-Hanbury [43] , the will and surroundings circumstances were clear for the court to conclude that a trust was intended by the testator. The will stated [44] . The intention of the testator was clear. Johura has mentioned a similar statement as Adams and Kensington Vestry and therefore the courts may fail the disposition because surroundings were unclear and no trust could have been proposed by the precutory words Johura used.

Johura has given a conditional gift to her daughter Nazia. In Re Steele’s Will Trusts, the testator intended a trust where her Will was drafted in similar terms to a precedent that created a trust. Mrs Adelaide Steele, by her Will provided as follows [45] . Charles died having made a will declaring [46] . The court held a trust was created in accordance with the intention of the testator; likewise Johura’s provision probably shall pass.

A power enables a person to act. When the subject to an intended trust is uncertain the intended express trust fails. This is because it’s unclear which property is supposedly subject to the trust [47] . In Re Golay [48] , executors under a will were directed to allow a beneficiary “enjoy the use of one of my flats and receive a reasonable income from my other properties”. The word reasonable seemed too uncertain; thus the gift was upheld. Similarly, Palmer v Simmonds [49] , there was no trust as the word ‘ bulk’ was uncertain. Hence the disposition probably may fail, as it is uncertain, which house Lucy, should reside in.

For a valid discretionary trust, “it is simple law that a trust must be for ascertainable beneficiaries” [50] . Before McPhail, one had to be capable to draw up a complete list of beneficiarie’s [51] otherwise equal shares [52] . Lord Wilberforce expressed the latest test of certainty [53] . This was the same test, which the courts had earlier applied to powers [54] . The COA in Re Badens Deed Trusts [55] held that the test was satisfied & was prepared to give a narrower classification of dependants. The word dependants were defined as a person who is completely or partially dependent on the means of another. The class may include any size. It would be for the trustees to be convinced that a given individual is a relative or dependant of an employee. Failure to convince the trustees means that the individual is not within the class and hence will not benefit from the rental income from Manton Properties.

In Boyce v Boyce [56] , the gift failed because it depended on Maria’s choice and it was not possible to identify which two houses should be given to Charlottle. It is uncertain which houses Ayesha should keep, providing she does not die and make a choice should be given to Meena. The trust fails for uncertainty of subject matter so therefore this disposition may fail

In Pemsel’s case [57] Lord Macnaghten’s statement of what the courts should recognise as a charity was [58] .

A trust will be charitable under Relief of Poverty if the beneficiaries are elderly, helpless or suffering poverty. In Re Coulthurst [59] , Sir Raymond Evershed indicated that it should be treated as such [60] . In Re Gwyon [61] , the trust failed as the gift went to every child in the area instead of limited children.

A gift to be charitable must be for the bene”t of the public. The 2006 Act provides [62] . Thus, education is generally charitable; public schools may be charitable, aslong, as they are not run for private pro”t as in Re Girls’ Public Day School Trust [63] . In Re Hopkins’s Will Trusts [64] , a trust for the promotion of research Bacon Shakespeare script was held charitable. Wilberforce J held [65] . The individual will need to establish they are suffering from poverty or meet the criteria regarding education

Johura has precisely stated that ten percent of her shareholding to be given to her youngest child. Reference to which child is unclear because an infant en ventre sa mere has for certain purposes been considered a person. Long v Blackall 1797 was the only case where that lawfulness of making a child en ventre sa mere a life. In Thullusson, the court cites various older authorities that ascertain that an unborn child is a legal person equal to that of human being who has already been born. In 1795, Doe v Clarke [66] the use entitlement was at issue, but Lord Chief Justice Eyre interpreted the words “living children” in a will to include an unborn human being. Lancashire v Lancashire and Goodtitle v Wood go upon the same principle [67] . In Ball v Smith [68] , a child en ventre sa mere when the intestate dies, once born, is permitted to take his or her share of the estate. In Ebbs v Smith [69] the court ruled that this included a baby who was still in the womb at that time. In Occleston v Fullalove [70] , COA in Chancery was argued for the appellant that although the child was en ventre sa mere at the date of the will subject to the litigation, there was neither principle nor authority against such a child having a reputation of paternity. The court allowed the child to share with her sisters under the will once born. Not so long ago in Re Blech [71] ” did not mean only those children who were alive at the date of her death would be entitled. But infact meant all grandchildren, whenever born, would obtain an interest. Hence Kiran should be considered as a person who also has legal share under the will.

Reference to which shares are to be given is unclear, equally in Hunter v Moss the declaration did not state which 50 company shares were subject to the trust. In Re London Wine [72] , It was held that no trust has been created because it was impossible to identify which exact bottles of wine from the total stock actually belongs to the purchaser and therefore failed for uncertainty of object matter. In Re Goldcorp Exchange Ltd [73] , it was difficult to establish whether each individual can be identified as owners of an individual part of the bulk gold.

Residuary estate [74] is what remains of the donor’s property after debts and other expenses have been deducted [75] . Which child she was referring to is unclear however; doctrine of equity gives Kiran the right to be among the beneficiaries of her late mother’s property.

Johura always mentioned the boat as “Ours”, equally in Ann Phyllis Rowe v Edward Prance [76] the claimant succeeded. The parties had a discussion concerning “security” in which the defendant indicated that the claimant security was her interest in the boat. Likewise Johura mentioned the boat was for her husband’s security for the future. Constant use of the word “our” indicated a purpose that there was no division to be drawn between the defendant and the claimant concerning ownership of the yacht. The maxim “equality is equity” should be applied. Therefore Assad may be given the boat for his future security. In contrast, Parrott v Parkin [77] the couple did not give any thought to whom will have the beneficial interest in the motor yacht.

In Richards’s v Delbridge [78] , the court would not perfect an ineffective transfer of the legal title to property to an intended trustee to constitute a trust. If the property fails to get into the hands of the intended trustee, there is no trust. Thus, the eldest son probably will not have the interest.