Secret Trust Essay

1565 words - 7 pages

The questions raised by this problem concerns the law secret trust. Secret trust is an express trust an express trust is created by a person based on an oral or a written statement in which a trust will form
Both fully secret and half secret trust can be valid and enforceable even though they lack the compliance with the formalities which are set out in s 9 of the wills act 1837 and other statutes. A full secret trust is not declared in the will, this means that the trustee takes the property absolutely . Whereas in a half secret trust the existence of the trust is acknowledged in the will which partially complies with the Wills act however the identity of the beneficiaries is undisclosed ...view middle of the document...

This is the instance in this case. In a half secret trust, the trustee must be identified on the face of the will and must be informed before the will is made and accept or acquiesce must have taken place. It can be clearly identified that Dan left his cottage with the intention for Gurpreet to be the trustee of that will. We know that Dan had an intention to create a trust as he stated that he would leave instruction to Gurpreet.
In regards to communication of the purpose of the trust is that it must be before or at the same time as the will . In order for the half secret trust to be effective Dan must have communicated the terms of the trust, including the identity of the beneficiaries to Gurpreet before or at the time of the will. Once these conditions are satisfied it would then be achievable to include the terms of the secret trust into the will in order to fulfil the formalities required of the Wills Act 1837. Where the terms are not communicated at all the half-secret trust could fail and the property will be held by the trustee on resulting trust. In Re Keen
It could be held that the trust could be declared void because the communication of the terms of the will before the trust was executed was inconsistent with the will communicated later on. In Re Bateman the court held that since there was no evidence on the terms of the trust, it was declared void. In Re Rees it was held that the testator’s oral communication about the surplus conflicted with the terms of the will. In Re Cooper it was held that if the testator makes a change to the trust after the will has been executed the will would not be effective if the changed has not been communicated to the trustee. In this instance Dan did not communicate the new terms of the trust to Gurpreet, he later communicated to him that he wanted to leave a ‘sum of money’ to Jenny which could be held as ineffective as the will would be inconsistent with what has been communicated to him he would then be changing the terms of the trust.
Furthermore there is no evidence of any further communicated instructions in regards to the terms of the trust.
Even though Gurpreet has accepted the trust, the trust has not been completely constituted at the time this means that the trust can be revoked until it crystallises on Dan’s death. This means that Dan can change the terms of the trust either by revoking, or altering the trust .
This could mean that Gurpreet would be able to hold the property on resulting trust for Dan’s estate .The legatee in this instance Gurpreet is not required to do anything to demonstrate acceptance , he accepts the terms of the trust once he is aware of the Dan’s wishes during his lifetime. Gurpreet will not be entitled to benefit from the trust, as it would be in contradiction of the will. However if the secret trust fails Gurpreet will hold the property on resulting trust for the testator’s estate.

There could be a possibility that Dan created a new trust within the...

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