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EXPRESS TRUSTS! 📃 (DUTIES & POWERS (Re Lloyd [1938] ⚰️ (The testatrix…

- - - - Special Power 👨‍👩‍👧‍👦: The choice of appointees is restricted, by the donor of the power, to a particular class, such as issue or a list of individuals, e.g. "X may give Y to such of my children as they wish." If appointee chooses to give Y away, it must be to someone in the class (i.e. one of my children). [IN/OUT]
      - Hybrid Power 🚷: Enables the appointer to appoint anyone except certain individuals designated by the donor, e.g. "X may give Y to whomever they choose, with the exception that they may not appoint in favour of themselves." If X dies without giving Y to another, it will be disposed of according to my estate, not hers. [IN/OUT]
      - General Power 🌎: The donee may appoint to anyone in the world. The donee may even appoint to herself unless the power is exercisable only by will, e.g. "X may give Y to anyone in the world." [IN/OUT]
  - - - Trust Power/Discretionary Trust in Narrow Sense 💐: Trustee has power of selection regarding beneficiaries and/or shares, but is obligated to perform. [IN/OUT]
      - Discretionary Trust 🐶: There is a power within a trust, paired with an interest defeasible by condition subsequent/on the exercise of the power (taker in default, who is beneficiary). [IN/OUT]
- - - - Corpus Uncertain = Fail: Based on the possible alternative interpretations of the phrase establishing the extent of the trust property, I find that the trust should fail on the basis that the corpus of the trust is uncertain, e.g. phrase "and other property" is capable of a number of interpretations.
    - - Reasonable ≠ Uncertain: The court is constantly involved in making such objective assessments of what is reasonable and it is not to be deterred from doing so because subjective influences can never be wholly excluded.
    - - Can a trust be created without separating specific shares? Yes. (But it's controversial.)
    - - The certainty of subject matter requirement has two components. First, a trust must have property that can be clearly identified as its subject matter: It must be possible to determine precisely what property the trust is meant to encompass. Second, the terms of the trust must define the portion each beneficiary is to receive or must vest the discretion to so decide in the trustees.
    - - Principle of "Equity is Equality" 🍒: applied when there is a fixed trust which does not declare expressly the beneficial interest to be taken by each beneficiary, e.g. no mention of how shares are divided.
  - - - Power → In/Out Test: f the donee of the power (whether or not he has any duty) desires to exercise it in favour of a particular person it must be possible to determine whether that particular person is or is not within the class of objects of the power. And it must be possible to determine the validity of the power immediately it comes into operation.
      - Administratively → Impossible Void: It may be that there is a class of case where, although the description of a class of beneficiaries is clear enough, any attempt to apply it to the facts would lead to such administrative difficulties that it would for that reason be held to be invalid.
    - - Discretionary Trust → In/Out Test: The test for the validity of trust powers ought to be similar to that accepted by this House in Re Gulbenkian's Settlement for powers, namely that the trust is valid if it can be said with certainty that any given individual is or is not a member of the class.
      - Administrative Unworkability: There may be a third case where the meaning of the words used is clear but the definition of beneficiaries is so hopelessly wide as not to form "anything like a class" so that the trust is administratively unworkable... e.g. "all the residents of Greater London."
    - - 'Anyone But'/Hybrid Power: A 'hybrid' power vested in a trustee to appoint to anyone in the world except a specified number or class of persons was not, despite the fiduciary duties of the trustees, rendered invalid merely by the width of the power and the number of persons who were objects of the power.
      - In exercising such a power of appointment the duties of the trustee are
        (a) to ensure that any appointment was within the power,
        (b) to consider periodically whether to exercise the power,
        (c) to consider the range of objects of the power,
        and
        (d) to consider the appropriateness of individual
        appointments;
        ∴ valid.
    - - Does not invalidate trust. Example is if beneficiaries are "my children" but one child's whereabouts are unknown.
    - - The third requirement that all trusts must meet in order to be valid is that the objects must be described with sufficient certainty. The class of beneficiaries must be described in sufficiently certain terms that the trust can be performed. Certainty of objects is required because the trustee cannot be sure that he is performing properly unless the objects are clearly specified at the time of distribution. A trust that fails to pass the certainty of objects test will fail, and the property will result to the settlor or testator's estate.
        The test for certainty of objects is different for a fixed trust than for a discretionary trust. A fixed trust is one in which the trustees have no discretion to decide who the beneficiaries are or in what proportions they are to take; the shares or interests of the beneficiaries are specified in the trust instrument or are ascertainable. The test for a fixed trust is the "class ascertainability" test: It must be possible to ascertain each and every object, so that a trustee can make a complete list of all beneficiaries. E.g. a trust of 10k "to the members of my family in equal shares" is a fixed trust-unless the trustees know who all the family members are, they cannot distribute equally.
        A discretionary trust must comply with the "individual ascertainability" test. For both a discretionary trust and a power of appointment, it must be possible to say with certainty whether any given individual is or is not a member of the class" (McPhail v Doulton). Thus, there is no need to be able to ascertain every member of the class of objects of a discretionary trust. A trustee need not distribute the subject matter of a discretionary trust in equal shares.
  - - - Re Mixing (SCC): You can mix. It's not a factual question about whether you mixed or not. It's about intention: If there's a stipulation prohibiting mixing, it's a sign of a trust: Given the intention to create a trust in the agreement between the travel agency and respondent, the absence of a prohibition on the commingling of funds could be considered but was not determinative of the type of relationship.
    - - Re Mixing: The high court said that if the trust money is placed in a separate account there will be a trust, but if it is mixed in it cannot be a trust [OVERRULED].
    - - Mention of Trust Not Conclusive - Contextual Approach: For a trust to be validly constituted, there must be a clear intention to create it, but the word "trust" is neither conclusive nor indispensable… In the absence of formal trust documentation, the court must look at the surrounding circumstances and the evidence as to what the parties intended, as to what was actually agreed and as to how the parties conducted themselves to determine whether there was "certainty of intention"
    - - Stilted Lawyers' Language Not Required: ... we are dealing with simple people, unaware of the subtleties of equity, but understanding very well indeed their own domestic situation. It is right that one should consider the various things that were said and done by the plaintiff and Mr. Constance during their time together against their own background and in their own circumstances.
      - Colloquial Comments Accepted: The words ... 'this money is as much yours as it is mine', clearly convey a present declaration that the existing fund was as much the plaintiff's as his own.
    - - Dominant Intention: The Court has then to endeavour to give such effect to the wishes of the testator as is legally possible, by ascertaining which part of the testamentary intention predominates and by giving effect to it, rejecting the subordinate intention as being repugnant to the dominant intention.
      - Contextual Approach: ... it is important never to lose sight of the true principle of construction in such cases - that it is the duty of the Court to discover the meaning of the words used by the testator, and, from them and from such surrounding circumstances as it is permissible in the particular case to take into account to ascertain his intention. For this purpose, it is important to have regard not only to the whole of the clause... but to the will as a whole which forms the context to the clause (Lucas-Tooth).
    - - E Gillese 📕: To satisfy the certainty of intention requirement, the court must find an intention that the trustee is placed under an imperative obligation to hold property on trust for the benefit of another. Certainty of intention is a question of construction; the intention is inferred from the nature and manner of the disposition considered as a whole. The language employed must convey more than a moral obligation or a mere wish as to what is to be done with certain property. The language used need not be technical, so long as the intention to create a trust can be found or inferred with certainty. The words of request, as well as the entire document as a whole, must be considered in determining whether the requisite intention exists.