Tutorial 3 Completely AND Incompletely Constituted Trusts AND Executed AND Executory Trusts PDF

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COMPLETELY AND INCOMPLETELY CONSTITUTED TRUSTS AND EXECUTED AND EXECUTORY TRUSTS 1.

Distinguish between an executory/trust and an incompletely constituted trust: Are trusts arising under wills incompletely constituted? Why?

A completely constituted trust is one where there is an express declaration of trust and vesting of trust property in the trustee at law and in the beneficiary at equity. Until that has been done, the trust is incompletely constituted. Two good examples of completely constituted trusts are the testamentary trusts, i.e. trusts arising through settlements, wills and inter vivos trusts. In a testamentary trust the personal representative of not the trustee himself is under a duty to transfer the trust property to the nominated trustee. In an inter vivos trust the settlor can declare himself as trustee. Lee Eng The v The Thiang Seong, the court explained that whether a trust is enforceable or not depends upon whether it is completely or an incompletely constituted trust. A trust is said to be completely constituted when the trust property has been bested in trustees for the benefit of beneficiaries. Until that has been done the trust is incompletely constituted. The distinction between completely and incompletely constituted trusts is of importance principally with regard to the question of consideration. In other words, the question to be considered is whether valuable consideration was given for the creation of the trust. If valuable consideration was given in exchange for the creation of the trust, it does not matter whether the trusts is completely constituted or not, for equity regards as done that which ought to be done and will perfect an imperfect voluntary trust. But there is no equity to perfect an imperfect voluntary trust.

Executory trust/ Completely constituted trust To transfer the property to the trustee the settlor has to observe the current mode of transfer of that item of property. Property may be immovable or moveable. For example, to convey land the settlor has to register it in the name of the trustee according to the rules of the National Land Code 196. IN the case of share certificates, the name of the trustee has to appear on the same and it has to be registered with the Registrar of Companies under the Companies Act 1965. If it is a car then the key must be handed over to the trustee, i.e. a symbolic delivery must be effected in the case of chattels. Incompletely constituted trust There may be an express declaration of trust but the subject matter has not been vested in the trustee at law and in the beneficiary at equity. Generally the beneficiary of an incompletely constituted trusts cannot enforce the trust. Equity will

not perfect an imperfect gift. But the beneficiary of a completely constituted trust can enforce the trust even if the beneficiary is a volunteer. Are trusts arising under wills incompletely constituted 2.

Janda comes to you and says, “In 1989 my late husband decided to create a trust for my benefit over his lands worth about fifty thousand dollars. He appointed my uncle Samy to be the trustee and to vest the lands in him executed the necessary transfer forms under the National Land Code on 1st March 1989. The forms were presented to the Land Office in my district on 5th March 1989 but the change in ownership was only effected on 15th August 1990. I do not know why there was such a delay on the part of the Land Office. My husband died on 13th February 1994. The estate duty people say that my husband’s estate is liable to pay duty on the lands over which the trust was created in 1989. What is the legal position? Advise Janda.

Three certainties Vesting of properties, Milroy v Lord, time delay of 17 month, you have to advise Janda as well, what are the cases that might go against her Type of property, the formalities of property transfer, National Land Code and so on. Engaged the delay vesting and 3 certainties using Re rose to uphold the rtust, can only come into effect depending on the type of trust. Mention whether it is cct, Ict or executory (good, the court will allow another instrument to be added in). When the estate duty abolished, before that (1991), the duties will be imposed. When does the trust comes into effect?

3.

Stephanie comes to seek your advice. She says, “twenty years ago I was incensed by a burning desire to be a nun. Before I entered the convent I created a trust for my relatives by which I purported to settle any property which I might become entitled to on the death of my father, James. James died sixteen years ago and the property I was entitled to was transferred to the trustee of the settlement I mentioned earlier. I spent nineteen years in the convent but I left last year because they would not make me the Reverend Mother. While in the convent I read law, particularly Equity and Trusts. Since my relatives were

volunteers could I ask the trustees of the settlement to transfer the property back to me?” Advise Stephanie. If there is a trust for the relatives, the relatives can enjoy the properties. Certainty of property, she is looking a future-acquired properties. Certainty of beneficiaries, look at the Distribution Act, getting a class of beneficiaries, uncertain as the term relatives s vague. Then whether there is a discretionary trust, go through discretionary trust cases. Who is the trustee, not mention Time delay in Stephanice case, den Re Bowden?? Case, even though there is a delay. Find out the three certainties. They are concurrent Then you need to have vesting. 20-x? Just because you think that sixteen years ago there is a trust, but she could not prove he trust, so vague, even though she can prove that she has the rights using the case of Re Bowden, but we can fight back by saying that the time lapse in Re Bowden and in the present case is so much different. Relatives, Stephanie and Convent. Three exceptions the court recognized, the principle of Strong v Bird, the concept of Donatio Mortis Causa, and the concept of proprietary estoppel....