Certainity of objects

Question 1

Certainty of objects: fixed trusts?

Answer 1

• If in a fixed trust, with a single beneficiary, there is a certainty as to who settlor intended to benefit then there will be certainty of objects but if there is uncertainty as to intended beneficiary the trust will fail.
• However, if with multiple beneficiaries, but uncertainity as to their identities, the trust will not necessarily fail completely - if identifiable beneficiaries have a beneficial entitlement which is not dependent upon entitlement of uncertain beneficiaries, they can still take interest.

Question 2

What is the test for a fixed trust with equal distribution between class?

Answer 2

Complete list test: trustees must be able to say who all beneficiaries are. Such trusts requires both:
* conceptual certainty: refers to precision of language used by settlor to define class of persons whom they intend to benefit.
* evidential certainty: refers to extent which evidence in particular case enables trustee to identify objects of the trust

Question 3

What is the test for Powers of appointment?

Answer 3

Any given postulant test (is/is not test): requires trustee to be able to say with certainty whether any given individual is or is not a member of class.

• If trustee is not able to determine who falls within class of objects, they risk exercising power improperly - objects have power to constrain the improper use of power but before court can make a judgement, it must be able to determine individual making claim is a member of class of obejects.

Question 4

Does conceptual certainty apply to discretionary trusts?

Answer 4

Yes, as if objects aren’t clearly defined, trustees will not be able to apply is/is not test with certainity.

• “employees’ of a company = employees have legal meaning meaning so conceptually certain but a well drafted trust deed will specify whether it applied to current or extended to future/past employees
• “friends” of relative = conceptually uncertain as how does one define friends?

Question 5

What is the law on evidential certainity for discretionary trust?

Answer 5

• no majority decision on need for evidential certainity
• for C to prove to trustee’s satisfaction that they are within the class - if they fail to prove, they are considered outside of class

trust will still be valid notwithstanding prescene of some degree of evidential uncertainity

Question 6

Why could a discretionary trust fail?

Answer 6

Where class of objects is too wide to form anything like a class so trust is administratively unworkable (e.g., class of all residents of Greater London)
* size of class does not invalidate fiduciary power of appointment

Question 7

What is the consequence of uncertainity in an inter vivos arrangement?

express trust

Answer 7

Trust will likely fail and be a resulting trust for settlor (unless evidence to contrary) either presumed (uncertainity to intention) or automatic (uncertainity to objects or subject matter)

Question 8

What is the consequence of uncertainity in a testamentary arrangement?

Answer 8

If interpreting will, must ask whether there is an intention to create a trust at all:
* if clear that person is intended to receive property, but unclear that they are intended to be trustee, then effect is a gift, even if some suggestion thet they might benefit another
* if will clearly provides person is intended to be trustee but uncertainity as to subject matter or objects, trust will fail and executors will not be required to transfer legal title to intended trustee and property will form part of residurary estate.