Secret trusts
Disposal of property on death – Secret Trusts
Definition: An owner of property dies, that property passes to those entitled under the law of succession.
2 main methods:
1) Through a valid will
2) Intestacy rules
Will – series of specific bequests or legacies of specific assets to specific individuals who will receive the assets not disposed off.
If no residue clause then the rules of intestacy operate.
Requirements of a valid Will
1) Capacity
2) Age
3) Mental Capacity
4) Intention
5) Formalities
Intention – testator must be aware of the contents of the will being executed and approve them, unless in suspicious circumstances – compliance must be proved ‘on the balance of probabilities’.
Formalities – Wills Act 1837 s.9
A will is not valid unless made in writing and signed and attested
Only those identified in a valid will shall be entitles to receive property on the testators death
Alterations must also conform to the provision of the act.
Arrangements outside the terms of the will, which do not comply with the terms of the will, shall be held invalid.
Why secret trusts?
A secret trust or half secret may take effect on the death of the testator without the need to specify terms of the trust in a will or reveal its existence.
Secret trusts operate to prevent unconscionable behaviour on the part of the intended trustee, must be with good conscience.
Fully secret trusts
McMormick v Grogan (1986)
X leaves property Y apparently beneficially
X communicates to Y his intention that Y is to hold the property on certain trusts or subject to a certain condition
Y accepts either expressly or impliedly
Half Secret Trusts
Blackwell v Blackwell (1929)
X leaves property to Y and Z who are identified trustees on the face of the will.
E.g. to Y for the purposes which I have previously explained to him.
X communicates his intention to Y
Y and Z accept either express or impliedly
Common requirements?
Intention
Definition: An owner of property dies, that property passes to those entitled under the law of succession.
2 main methods:
1) Through a valid will
2) Intestacy rules
Will – series of specific bequests or legacies of specific assets to specific individuals who will receive the assets not disposed off.
If no residue clause then the rules of intestacy operate.
Requirements of a valid Will
1) Capacity
2) Age
3) Mental Capacity
4) Intention
5) Formalities
Intention – testator must be aware of the contents of the will being executed and approve them, unless in suspicious circumstances – compliance must be proved ‘on the balance of probabilities’.
Formalities – Wills Act 1837 s.9
A will is not valid unless made in writing and signed and attested
Only those identified in a valid will shall be entitles to receive property on the testators death
Alterations must also conform to the provision of the act.
Arrangements outside the terms of the will, which do not comply with the terms of the will, shall be held invalid.
Why secret trusts?
A secret trust or half secret may take effect on the death of the testator without the need to specify terms of the trust in a will or reveal its existence.
Secret trusts operate to prevent unconscionable behaviour on the part of the intended trustee, must be with good conscience.
Fully secret trusts
McMormick v Grogan (1986)
X leaves property Y apparently beneficially
X communicates to Y his intention that Y is to hold the property on certain trusts or subject to a certain condition
Y accepts either expressly or impliedly
Half Secret Trusts
Blackwell v Blackwell (1929)
X leaves property to Y and Z who are identified trustees on the face of the will.
E.g. to Y for the purposes which I have previously explained to him.
X communicates his intention to Y
Y and Z accept either express or impliedly
Common requirements?
Intention