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Memorandum Law - Assignment Example

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Part I Memorandum From: To: Law Firm Date: Re: Alfred Andrews Issues: Alfred Andrews established four separate trusts by transferring townhouses to his two children Brian and Colleen, his sister Patricia and his widow companion Mrs. Goodchild. On the facts of the brief, the transfers were made during Andrew’s lifetime with an expectation that the property would be held by the donees upon his death…
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Memorandum Law Assignment
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Download file to see previous pages Goodchild would inherit the townhouse absolutely. Mr. Andrews has subsequently attempted to revoke these gifts. The main legal issues are therefore whether or not Mr. Andrews has established trusts or absolute gifts and if so, whether or not he is at liberty to revoke these trusts/gifts. In order to determine whether or not the gifts/trusts can be revoked it will be necessary to ascertain whether or not Andrews has the power to revoke the gifts as a settlor or otherwise. Rules/Authority It is a general principle of the law of equity and trust that once an express trust is created it cannot be reversed by the settlor.1 However, in the event a settlor reserves unto himself the power to revoke a trust, and he decides to exercise that power, the trust property will revert back to the settlor.2 In addition, the doctrine of donatio mortis causa may have a role to play in the settlor’s right to revoke a gift.3 By virtue of the doctrine of mortis causa, a settlor transfers property to a donee in contemplation of his death and with the understanding that the property will be held by the donee absolutely upon the settlor’s death.4 In other words, a gift made with the intention that the donee obtains absolute title upon the donor’s death is distinguished from an inter vivos absolute gift.5 Therefore the consequence of such a gift is that the donor may revoke the gift if he does not die. There is one caveat: the gift must be made in contemplation of pending death, not in contemplation of death at some future speculative time in the future.6 Where the death is speculative the gift is “inter vivos but conditional on death”.7 Thus the only method of revocation of the intervivos gift conditional upon the death of the donor is by an express provision of revocation in the trust instrument or transfer deed or by expressly resuming possession of the property transferred.8 At its heart, the main question for determining whether or not a trust can be revoked or trust property recalled is determining whether or not the settlor intended to divest himself completely and absolutely of the trust property.9 In this regard, the doctrine of resulting trust will be significant. In general it is the common intentions of the settlor and the trustee’s of the trust. A resulting trust arises to transfer property back to the settlor when both the trustee and the settlor are aware that the settlor did not intend to transfer the property absolutely to the trustee or that the trustee treats the property in a manner that is inconsistent with the donor’s intention.10 Thus resulting trusts operates on the conscience of the parties.11 Application to the Facts The gifts of the townhouses to Andrews’ children Colleen and Brian appear to be gifts only intended to take effect upon Andrews’ death. This was expressly noted in the attorney’s letter to the children and represents the terms upon which they accepted the gift of the townhouse. However, there is no evidence that Andrews made the gift in contemplation of death as he merely said that he was at a place financially where he wanted to pass his wealth along. As such the doctrine of donatio mortis causa will not be an available ground for Mr. Andrews to force the return of the gifts to him. There is no evidenc ...Download file to see next pagesRead More
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