Equity, Trust, and Provisions - Essay Example

? (a) In order to know whether a trust is established under this provision, it is important to understand the three certainty tests that establish a valid trust. In the case that involved Knight vs Knight, Lord Longdale denotes that three certainties are; certainty of the object, certainty of intention, and certainty of the subject matter. In this case, Richard Knight made a will that passed all his property to his brother Thomas Knight, and to his male offspring’s. If there was none, then his property was to pass over to descendants of his late grandfather, Sir Richard Knight. However, Thomas died without male descendants, and the will was challenged in a court. That’s when Lord Longdale ruled that Richard Knight did not make a trust, because his will did not satisfy the three certainty tests named above (Brophy, 2008, p. 91). In the case above, the provisions satisfy only one certainty that is certainty of intention. In Jones vs. Lock 1865, the court denoted that for a trust to be established, it must pass the certainty of intention test. In this case, Robert Jones loosely said that he was going to keep son 900 pounds for his child. Before altering his will, he died. The issue under consideration in this case therefore was on whether the 900 pounds he had offered belonged to the child, or to the residuary legatees. In arriving at their decision, the court held that Robert Jones did not have any intention of initiating a trust for the child; therefore the money was still under his residuary legatees. On this basis therefore, the court denoted that certainty of intention must be proved for a trust be valid. This argument is further reinforced in the case involving Paul vs. Constance 1977. In this case, the court denoted that prove of certainty of intention is an important factor in determining the validity of a trust (Harrison, 2012, p.29). Sam, in his will provides for the distribution of his shares to Margaret his sister, and four grandchildren. However, he does not specify the amount of shares to be distributed to the individuals. In the case law that involved Palmer vs Simmonds 1854, the court denoted that there wasn’t any trust established when the testator wrote in his will that the bulk of his property should go to four unnamed individuals on an equal measure, but subject to a number of stipulations (Brophy, 2008, p. 41). This is because the Testator was not specific on the value of his property that was to be shared. On this basis therefore, the above provision is not valid, and does not create a trust, because he does not prove certainty of subject matter. Another issue that arises also is that Sam does not give the names of the grand children under consideration, and it is therefore difficult for the trustees to know whom Sam had in mind. In the case law involving IRC vs. Broad way Cottages, the court denoted that in an instance where it is difficult to establish the specific beneficiaries of a will, then the trust established is void (Brophy, 2008, p. 56). In this case, the testator wrote a will denoting that any income derived from his property should benefit the settlor’s wife, and other relations of the settler. The term relation was not certain, making the will void. On this basis therefore, the provisions in this will are void, and do not establish a trust. (b) In this case, Sam satisfies the certainties established in the Case law of Knight vs. Knight. This provision satisfies the certainties of object, intention and subject matter. For instance, Sam identifies the object to be disposed, and that is a bronze statue of a musician; and the beneficiaries who are the grandchildren of Fiona. The case involving Re Kayford 1975 is a perfect example of a case law that depicts the importance of certainty of intention in a will (Brophy, 2008, p. 67). In this case, the managers of Kayford mailing company were concerned that their organization will be insolvent. On this basis, they opened an account with another bank to keep payments that came from their customers. The aim of this was to ensure that their creditors did not have an access to this money which was a pre-payment from their customers. Unfortunately, the suppliers of Kayford Company became insolvent, and the Kayford Company also became insolvent. When their creditors demanded the money, Kayford refused since it was held in trust for its customers. The judge in this case agreed with the arguments of Re Kayford, and denoted that there was certainty of intention to create a trust for the customers of Re Kayford company. On this basis therefore, Sam satisfies certainty of intention in by creating the provisions contained in the statement. The provisions of this statement also clearly identify the item to be disposed of. The item under consideration is the bronze statue of a musician belonging to Sam. For instance, in the case involving Hunter vs. Moss (1994), the defendant claimed 5% of the shares issued by a company belonging to Moss. In this case, Moss Company had 1000 shares on issues, and as part of his employment contract, Moss offered Hunter some 50 shares. The issue in this case was on whether there was a certainty of the subject matter, concerning the language used in giving out the 50 shares to Hunter. The courts held that 5% issuance to Hunter created a valid subject matter, and therefore the contact satisfied the test of certainty of subject matter, and this made the contract valid. In Holland vs. Newbury, the court denoted that it is impossible to separate or identify share separately, and therefore they must undergo a special treatment in a legal dispute. Sprange vs. Bernard further illustrates the point of validity of subject matter. In this case, the testatrix left some property to the use of the husband, and denoted that the remaining part of what he does not use was to be divided amongst family members. The court denoted that it was impossible to identify the meaning of the remaining part, and because of this the subject matter of the will was not clear. This made the provisions of the will invalid. Sam has also identified the beneficiaries of the statue, to include daughter, and her grandchildren. This notion satisfies the concept of certainty of objects. In the common law principles established in the case of Re Knapton 1941, the court established a manner in which the beneficiaries of the will could benefit. In this case, the testatrix gave a number of houses to be shared amongst her nieces and nephews (Parry, Kerridge and Brierley, 2009, p. 31). However she did not specify the exact manner in which the distribution of the houses should occur. On this note therefore, the court denoted that the beneficiaries of the will had a right to choose the houses according to the manner in which they were listed in the will. The argument by highlighting this case law is that a court can establish a method in which beneficiaries of a will share the gift in question. This is because the above statement by Sam does not specify the methods to be used by Fiona in giving the gift to her grandchildren. In regard to the above arguments, the provisions of this statement create a valid trust. This is an example of a fixed trust because it has a fixed gift to the beneficiaries, which is the bronze statue. (c) In this provision, Sam manages to satisfy the requirement of certainty of subject matter as identified in the case law involving Knight vs. Knight. The subject matter under this consideration is the 50,000 pounds that he left aside for his trustees to distribute to the inhabitants of Greater London. However, the proportion of this amount of money to be acquired by the beneficiaries is uncertain. This is because Sam uses a precatory statement which is difficult to understand, and might need some court interpretation. The term “think fit” is ambiguous and precatory, and it does not provide a clearly manner in which to allocate/ share the money provided amongst the residents. In the case law involving Adams vs. Kensington Vestry 1884, the testator left a will, entitling his property to the wife, and he used the term “ in full confidence” to denote his trust to the wife (Harrison, 2012, p.27). He believed that the wife would distribute the property in an appropriate manner to the children. The court denoted that the words in full confidence were ambiguous and precatory, and therefore there wasn’t any trust established for the children. However, in the 1905 case involving Comiskey against Bowning Hanbury, the court looked at the intention of the testator in analysing the words in question. In this case, the testator wrote a will, and denoted that he has confidence with the wife that she would distribute the estate equally amongst his surviving nieces (Parry, Kerridge and Brierley, 2009, p. 22). The court denoted that there was a trust established in this case, and the will was valid. However, if the beneficiary of a will dies before carrying out the provisions of the will, the trust under consideration can be void. This is better explained in the case involving Boyce vs. Boyce 1849. In this case, the testator left some houses to the wife, and the will stated that before she died, she should allocate one house to his daughter A, and the remaining houses she should allocate to his other daughter B. The wife died before making the choice, and therefore it was uncertain to the particular house that B should have, and on this note, the trust was void in regard to B (Parry, Kerridge and Brierley, 2009, p. 52). On this basis therefore, Sam has managed to create a valid trust by identifying the subject matter that ought to be distributed. Sam has also managed to identify the people who are to benefit from the money allocated, and they are the inhabitants of Greater London. In the case law involving McPhail vs. Doulton, the House of Lords denoted that the beneficiaries of a will can be a certain class of people. In this case, the testator denoted that his property and assets should benefit employees, ex officers, and officers of his company (Harrison, 2012, p. 22). On this basis, the House of Lords denoted that this people represented a specific class of people, and therefore certainty of object is clearly proved. This also applies to the above statement, which identifies the beneficiary of the will as inhabitants of greater London. They are a class of people, and therefore the statement is valid, and a trust is established. This is an example of a discretionary trust because the executors of the will are allowed to give out the money to the inhabitants of the greater London, at their own discretion. (d) This statement satisfies the principles of certainty of intention as established under the case law of Steel vs. National provincial bank 1948. The intention of the testator in this statement is to give out 300,000 pounds to his friends. In this case law, the courts denoted that for a trust to exist there must be a proof of intention to create the trust from the testator or testatrix. This was a case in which the testatrix left a diamond ring to his eldest son, and which was to be passed to the family’s eldest sons, for life. By analysing the provision contained in the will of steel vs. National bank, the court denoted that there was an intention to create a trust by the testatrix, and therefore the will was valid. In the above statement, the amount to be distributed is 300,000 pounds, and the beneficiaries are the friends of Sam. There is an established method of identifying who the friends of the testator are, and the job is given to his wife. In the case Doulton vs. McPhail, the House of Lords allowed the ascertainity test to determine who the beneficiaries of an estate or the provisions of a will are (Parry, Kerridge and Brierley, 2009, p. 31). In this case, the testator used a broad term of officers, ex officers, employee and ex-employees to refer to the beneficiaries of his will. On this note therefore, it is prudent to ascertain who this people are. In the above statement, the wife of Sam has the responsibility of ascertaining who the friends of Sam are. On this basis, this statement passes the test of certainty of object and subject matter, and therefore it is a valid trust. This is also an example of a discretionary trust because the executors of the will are to provide the money when they think that it is the right time, and at their discretion. Bibliography: Brophy, A. (2008). What Should Inheritance Law Be? Reparations and Intergenerational Wealth Transfers. Law and Literature, 20(2), 197-211. Harrison, C. (2012). Laws in conflict. Sutton, Surrey, England: Severn House. Parry, D. H., Kerridge, R., & Brierley, A. (2009). The law of succession (12th ed.). London: Sweet and Maxwell. Read More