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A woman executed a trust deed which contained the following provision:
“I give £200,000 to my Trustees to ensure that members of my family are educated in the best way possible.”
The Trustees appointed under the trust deed seek legal advice as to what to do with the £200,000.
Which of the following statements best explains why the trust is invalid?
A father provided 70% of the purchase money to buy a house, the son contributing the balance via a mortgage. The house was for their joint occupation. The mortgage lender would not have provided the finance had the father been a joint co-owner of the property because he was unemployed at the time. The decision was therefore taken that the property should be registered in the son’s sole name. The father instructed a solicitor to prepare a declaration of trust in which the son would declare that he held the legal title on trust for his father and himself in shares proportionate to their contributions to the purchase price, although this was never signed.
Does the father have a beneficial interest in the house?
A pension trust fund for the employees of an electrical power company has over the years successfully invested 25% of its capital in the shares of gas companies. However, 10 months ago, the trustees resolved at a meeting that they were morally opposed to investing in gas companies on the basis that those companies were in competition for business with the electrical power company. The trustees therefore purchased shares in computer hardware companies that historically have not performed as well as gas, and the trust fund has significantly decreased in value as a result. There are no terms in the trust deed that relate to investments.
Are the trustees in breach of trust for choosing not to invest in gas companies?
A man recently moved out of the home in which he had been cohabiting with his partner (the Owner) for the last 10 years. The Owner (registered as sole legal proprietor) bought this property 15 years ago, using her savings to pay a 10% deposit and a mortgage to pay the rest. The Owner always paid the mortgage repayments. Whilst they cohabited the man paid the utility bills as the Owner said this would be the fairest way to split their expenses and enable her to pay the mortgage. The man is claiming that he is entitled to an interest in the home as, during many conversations over the years, the Owner said that she would never evict him.
Which of the following best describes why the man may have a valid claim to an equitable interest in the property?
A testator died two years ago. His will left his estate on trust “for such of my children, as attain the age of 21 years, if more than one, in equal shares”. The testator was survived by a son, who is now aged 21 years, and a daughter, who is now aged 18 years.
Which of the following best describes the nature of the interests held by the children?
A man died three months ago, leaving a validly executed will, appointing his brother as executor and trustee. The will contains the following clause: “I leave my best paintings (by which I mean those most likely to increase in value) to my Trustee to distribute amongst such of my loyal friends as he in his absolute discretion decides.”
The man had a valuable collection of paintings in his estate and the brother wants to know about the validity of the trust in the will.
Is the trust in the will valid?
A settlor created a discretionary trust five years ago in favour of his grandchildren (who are all minors). The trustees are the settlor’s son and the settlor’s accountant. There are no express provisions in the trust instrument governing the power to select new trustees. The accountant trustee is close to retirement age and now wishes to retire from his role as trustee.
Which of the following best describes the steps to be taken by the solicitor acting for the trust to achieve this?
A woman executed a trust deed under which she declared that her brother would hold her shares in a private limited technology company on trust for her two children. The woman handed her share certificate to those shares to her brother. A week later, the woman died. In her will, she left all her estate to her sister.
Are the shares held on trust for the children?
A trustee steals £40,000 from a trust fund. He uses that money together with £20,000 of his own funds to purchase a car.
Seven years later, the beneficiaries have just found out about this car purchase. The trustee has petitioned for his own bankruptcy. The car is now valued at £45,000.
What can the beneficiaries do, if anything, to recover the funds that were stolen?
Ten years ago, the settlor (a banking lawyer) created a trust over the sum of £500,000 for “my wife for life, remainder to such of my children who survive my wife and if more than one in equal shares”. The trustees were two solicitors in the settlor’s law firm.
Eight years ago, the trustees agreed, at the request of the wife, to advance her the capital sum of £65,000 to help her fund some improvements to the marital home. At the time, the two children, aged 19 and 17 years respectively, lived with a friend of the family.
The wife has now died. Upon seeing copies of the trust accounts, the children are unhappy with the fact that they were not consulted about the advancement of the sum of £65,000 eight years ago.
Can the children bring a claim against the trustees for the advancement of capital?
Under the terms of a valid will, a woman appointed her son to hold her residuary estate on trust ‘for such promising young tennis players living in Wales and in such shares as [my son] thinks fit’. The woman was a past chair of a tennis club and grew up in Cardiff. Her residuary estate was made up of money held in various UK bank accounts.
The woman’s son asks a solicitor whether this trust is valid. The son wants to carry out the woman’s wishes as much as possible and has already put together a list of people who he thinks should benefit from the trust.
Is the trust valid?
During his lifetime, an accountant wrote a letter to a teacher, in which he said, ‘I have decided to give you my holiday home in Bowness-on-Windermere. I would like you to think about giving this home to your daughter when she reaches the age of 18 years’.
The daughter is now aged 18 years. She has found a copy of the letter and she says that she is entitled to the home in Bowness-on-Windermere. The teacher fell out with his daughter two years ago. The teacher does not want to transfer the home to his daughter.
Must the teacher transfer the home to his daughter?
Last month, a woman wrote to a banker as follows, ‘You will hold my house in Edale for my nephew, who shall become entitled to the house when he reaches the age of 25 years’. The woman executed a TR1 in favour of the banker.
The woman died two weeks ago. In her will (executed five years ago), she appointed the banker to be her executor. Everything in the will was left to the woman’s daughter. When going through the woman’s belongings, the banker found the TR1 in the hall sideboard in the woman’s home. Land Registry have confirmed that the woman was still the registered proprietor of the house in Edale when she died.
Is the house held on trust for the nephew?
An artist writes a letter to her brother saying, ‘The two of us shall be trustees over the sum of money in my savings account for your daughter until such time as your daughter marries or turns 30 years of age (whichever is the earliest), when it will become hers’. The brother telephoned the artist to agree. The daughter is aged 21 years.
The artist dies two weeks later. The artist had taken no steps before her death to put the money into a joint bank account in the names of herself and her brother. In her will, the artist named the daughter as the executrix of her estate.
Which of the following statements best describes why the money in the savings account belongs beneficially to the daughter?
Last month, having taken legal advice that he should start to transfer some of his wealth to lower his potential future inheritance tax bill, a man telephoned an ex-colleague to say, ‘I would like you to have my shares in Wright Stuff Limited in case you want to give some for such of my friends that stood by me whilst I was having treatment for my cancer and in such shares as you think is right’. Following the call, the man executed a stock transfer form over his Wright Stuff Limited shares and sent this to his ex-colleague together with his share certificate. The ex-colleague forgot to tell the man during the call that she was about to take her children on a long holiday to Florida, so was not around when the documents arrived at her house.
Last week, the man died. In his will, he appointed a solicitor as his executor and left his estate to the ex-colleague. The ex-colleague cut short her holiday to find the documents relating to Wright Stuff Limited on her doormat.
Do the shares belong absolutely to the ex-colleague?
A dentist died last week. His valid will contained the following provisions:
‘Clause 4: My Trustees shall hold £300,000 on trust for such of my children who before the age of 25 years successfully obtain an undergraduate 1st class degree …
Clause 15: Following the payment of my debts, funeral expenses, all gifts under this will and inheritance tax, whatever remains shall belong to my wife.’
There are two children: a son aged 24 years who graduated two years ago with a 1st class degree, and a daughter aged 17 years who has decided not to go to university. The children have agreed between them to split the £300,000 in equal shares.
Which of the following statements provides the best advice to the children in relation to the trust under clause 4?
A trust deed contains the following provision:
‘My Trustees shall hold my house in Oxford on trust to permit my husband to live in the property for the remainder of his life and after his death to hold the property upon trust for such of my son and daughter who survive my husband and attain the age of 25 years.’
The son is aged 28 years and the daughter is aged 20 years.
Which of the following best describes the beneficial interests in the trust fund?
A woman’s valid will contains the following provisions:
‘Clause 3: I give £200,000 to my Trustees to educate the young people of Cornwall about the importance of water safety …
Clause 17: Following the payment of my debts, funeral expenses, all gifts under this will and inheritance tax, whatever remains shall belong to The British Red Cross Society.’
Which of the following statements provides the best advice to the Trustees about clause 3?