Vous êtes sur la page 1sur 4

[TRUSTS]

TRUSTS

TRUSTS
Refers to trusts as the duty of aggregate
accumulations that rest upon a person called a trustee.
The responsibilities are in relation to property held by
him or under his control. The property by a court in its
equitable that he will be compelled jurisdiction to
administer in a manner lawfully prescribed by an
instrument or where there will be no specific provision or
to the extent that such provision is invalid or lacking in
accordance with equitable principles. As a consequence,
the administration will be in such a manner that the
consequential benefit and advantage accrue not to the
trustee but to the beneficiaries if there be any if not, then
for some purpose that the law will recognize.
A trustee may be a beneficiary in which case advantages
will accrue in his favor to the extent of his beneficial
interest.
Therefore a trust will arise
a.
b.

c.

d.
e.

As a result of a conscious act of the


settler/donor.
However, where there is no conscious act, then a
trust can be imputed as a result of a particular
statutory provision or as a result of the decision
of a court.
There can be as many settlers, trustees or
beneficiaries save as express provisions of the
law may otherwise limit. However, the practice
of having a single trustee is generally
discouraged.
Trust property can be anything ranging from
tangible to intangible.
Generally the trustee holds title to the property
and the beneficiary holds equitable title to the
property. As for the trustee, it is a right in rem
whereas for the beneficiary, it is a right in
personam. This means that, a trustee can sue
anybody who tampers with the title or land but
the beneficiary has no locus standi to sue a third
party. They can only do that when the trustee
acts against their interests.

f.

The consequential benefit to the beneficiary


may be property in kind or income may be an
entitlement at some future date, it may be
hinged on the trustees discretion, it may be
based on a contingency among others.
COMPARISON OF TRUSTS WITH OTHER
LEGAL CONCEPTS
Agent:
it refers a to a fiduciary relationship created
expressly by implication or by law in which one
party-agent acts on the directives of the otherprincipal and that other party is bound by the
actions of the agent.
Similarities
They both give rise to fiduciary
obligations such that the trustee must
act for the benefit of the beneficiary
and the agent can act for the benefit of
the principal.
They both have duty not to delegate.
An agent is generally not permitted to
bring an action in his own name but in
the name of the principal. A beneficiary
too has no right to institute an action in
the name of the trust against a third
party.
Differences
The trustee must have the title of the
property vested in him or her. If this is
not done, that will be an incompletely
constituted trust and is void in law.
Milroy v Rhode. On the other hand, for
agencies, title does not have to be in
their name.
The trustee is not bound by any
direction of the beneficiary but must
act in accordance with the trust deed
while an agent acts on the principles
directions.
Letters of administration
Generally, the law of succession states that if a
person died, no one is to administer the land
unless authorized. The administrator general

SECOND YEAR-semester one| NUWAGABA JOHN PAUL

TRUSTS
offers the letters of administration. They are
issued where;
Someone dies intestacy-death with no
will.
A will, but no executor appointed.
Differences
Letters of administration are a creature
of statute and can only be granted by
court.
An administrator is appointed purely
for distribution of the estate and after 6
months of distribution, they are
supposed to file a letter called an
inventory in court while a trust is much
more than that as it is about
management of the estate, distribution
and caring for the beneficiaries among
others.
Letters of administration take effect
upon a persons death while a trust
takes effect upon giving while a
settlers still alive though it can also
take effect upon death especially if a
person put it into their will.
Power of appointment
EXPRESS TRUST
A trust can either be created by will or deed with an
explicit declaration to that effect by the settler. However,
it need not make use of the word trust.
An express trust can be created by an oral direction. In
Gray v England revenue commissioners, on 1st February
1955, Mr. Hunter transferred 18000shares each of a
nominal value of 1pounds to the appellants. The
appellants were trustees for 6 settlements that Mr. Hunter
had created. On 18 February the same year, Mr. Hunter
directed his trustees to divide the above shares into
parcels of 3000 making 6 settlements. On the 25th of
February, the trustees prepared declarations of trust over
each of the 3000 shares which Mr. Hunter signed. The
commissioner assessed each one of the declarations to
stamp duty. They appealed and the issue was whether the

oral direction of Mr. Hunter on 18th February amounted


to a dispossession of an equitable interest or a trust.
Court stated that any declaration affecting land or any
interest there in must be in writing to be effective.
However, that declaration relating to personality need not
be in writing.
CONSTRUCTIVE TRUSTS
These largely developed in equity to provide an adequate
response to unconscionable conduct. Lord Denning
defined it as at rust imposed by law whenever justice and
good conscience require it. It is an equitable remedy by
which the court can enable an aggrieved party to obtain
restitution. The imposition of a constructive trust will
require the trustee to fully account for the property that
he holds on constructive trust together with the interest
thereon. The beneficiarys claim will have priority over
other creditors and they can trace the property into the
hands of a third party except a bonafide purchaser of
value without notice.
In banister v banister, one of the terms of an oral contract
of sale of 2 cottages 30 and 31 was that that the purchaser
was to allow the vendor to live in one of the cottages rent
free for as long as she liked. The purchaser paid 250
pounds though evidence consequently showed that the
market value of the cottages was 400 pounds.
Consequently the purchaser brought an action for vacant
possession to enable him sell one of the cottages with
vacant possession. Scott LJ said, It is we think clearly a
mistake to suppose that the equitable principle on which
a constructive trust is raised against a person who insists
on the absolute character of a conveyance for himself for
the purpose of defeating beneficial interest which
according to the true bargain was to belong to another is
confined to the cases in which the conveyance itself was
fraudulently obtained. The fraud which brings the
principle into play arises as soon as the absolute
character of the conveyance is setup for the purpose of
defeating the beneficial interest.

SECOND YEAR-semester one| NUWAGABA JOHN PAUL

TRUSTS
RESULTING TRUSTS

SECOND YEAR-semester one| NUWAGABA JOHN PAUL