Business Law Scotland : Trust
Definition – the law of Trust determines the relationship among trustee, trustor and beneficiaries over the property. Trustor means owner of the property, which enjoys extended bundle of rights over his property. Trustee is a person who manages the property. Beneficiary: A beneficiary is anyone who receives benefits from any assets the trust owns.
We have two types of trust. First division of types:
First is Inter Vivos - the management of the property during one’s lifetime. Mortis Causa – after the death, the settlement of the property after the death.
Second division of types:
Public – set up for the interest of public, in general. (Russia, особняк)
Private – set up for the benefit of individuals or group of individuals. (Batman Begins)
1. Creation of Trust
Capacity (16 in Scotland)*
Declaration of the Trust
Transfer of property
Must have a valid purpose
1.1. Declaration of trust
Must announce:
Creation and specify the purpose, beneficiaries and trustees.
No “special or technical form of words is needed”
MacPherson v MacPherson’s curator bonis (1894) 21 R 386 per Lord McLaren at p. 387
Q. Is it clear that the truster intended to bind the trustee to carry out the specified purposes
1.2. Transfer
Property must vest
Declaring self as trustee no need to transfer
Mortis causa comes into being on death of truster
1.3. Valid Purpose / Capacity
Trusts can be set up for the protection of the vulnerable
For the benefit of the public
For collective investment purposes
For minimising tax liability
For administering a deceased person’s estate.
How/why?
1.4 . Grounds for Invalidity
Void from uncertainty
Language must not be vague (Sutherland’s trust v Sutherland’s trust (1893))
Ineffective by reason of being overly wide
Reasonable person must be able to determine whether or not any given individual is within or outside the trust
1.4.1. Trust purposes are illegal
Vague purposes
Trustees dispose of property“ in such a way or
We have two types of trust. First division of types:
First is Inter Vivos - the management of the property during one’s lifetime. Mortis Causa – after the death, the settlement of the property after the death.
Second division of types:
Public – set up for the interest of public, in general. (Russia, особняк)
Private – set up for the benefit of individuals or group of individuals. (Batman Begins)
1. Creation of Trust
Capacity (16 in Scotland)*
Declaration of the Trust
Transfer of property
Must have a valid purpose
1.1. Declaration of trust
Must announce:
Creation and specify the purpose, beneficiaries and trustees.
No “special or technical form of words is needed”
MacPherson v MacPherson’s curator bonis (1894) 21 R 386 per Lord McLaren at p. 387
Q. Is it clear that the truster intended to bind the trustee to carry out the specified purposes
1.2. Transfer
Property must vest
Declaring self as trustee no need to transfer
Mortis causa comes into being on death of truster
1.3. Valid Purpose / Capacity
Trusts can be set up for the protection of the vulnerable
For the benefit of the public
For collective investment purposes
For minimising tax liability
For administering a deceased person’s estate.
How/why?
1.4 . Grounds for Invalidity
Void from uncertainty
Language must not be vague (Sutherland’s trust v Sutherland’s trust (1893))
Ineffective by reason of being overly wide
Reasonable person must be able to determine whether or not any given individual is within or outside the trust
1.4.1. Trust purposes are illegal
Vague purposes
Trustees dispose of property“ in such a way or