Chapter 15 - Trust law

Question 1

Trust is a relationship only recognised in ….?

Answer 1

Equity

Question 2

What is a trust?

Answer 2

One person (settlor) places property (trust property or settled property) under control of another (trustee) who is compelled in Equity to hold and deal with property for benefit of another person (beneficiary).

Question 3

Express private trusts

Answer 3

trusts intentionally made by the settlor

Question 4

3 ways to create a trust

Answer 4

Express trusts, implied trusts, statutory trusts

Question 5

3 types of express trust

Answer 5

Discretionary trust, bare trusts, interest in possession trusts

Question 6

Bare trusts

Answer 6

settlor creates a trust without imposing active duties upon the trustee. nominee arrangement, beneficiary is fully entitles to all the trust property

Question 7

Interest in possession trusts

Answer 7

beneficiary with interest in possession has immediate entitlement to the net income produced by the trust property as the income arises or has the immediate enjoyment of the use of the trust property

Question 8

What to remaindermen get in interest in possession trusts

Answer 8

has an absolute right to the income and capital, but only when the life tenant’s interest in the trust comes to an end (reversionary interest)

Question 9

Discretionary trusts

Answer 9

beneficiary has no right to trust income or capital - the trustees have absolute power to decide which beneficiary can benefit from the trust

Question 10

Exhaustive discretionary trust

Answer 10

trustees have to pay out but can decide how much

Question 11

Non-exhaustive discretionary trust

Answer 11

can do as they wish - full discretion

Question 12

resulting trust

Answer 12

trust property results back to settlor when comes to an end- this is an implied trust

Question 13

flexible life interest trust

Answer 13

allows property to be settled on a beneficiary for life, with trustees having power to terminate the life interest and establish a discretionary r other new trust in its place

Question 14

legal ownership pf property, and equitable ownership of the property

Answer 14

trustee of the trust is legal owner, and equitable ownership belongs to beneficiaries

Question 15

When no one named as remaindermen who becomes them?

Answer 15

remaindermen becomes the settlor

Question 16

Person who holds the legal title to a trust property is called?

Answer 16

The trustee (legal owner of a trust property)

Question 17

Accumulation trust

Answer 17

trust in which the trustees are under a duty to add the income of the trust to capital