The Three Certainties

Question 1

Certainty of Intention

Answer 1

• The Settlor must intend to create the trust
• Precatory words expressing confidence, belief, wish, desire, hope or recommendation are generally insufficient
• The use of the word trust is not definitive if lacking genuine intention
• No need to use the word trust, informal words and actions are acceptable
• The Settlor’s conduct alone may show intention

Question 2

Certainty of Subject Matter

Answer 2

• The trust property must be certain
• Tangible assets must be identified, usually through segregation;
• No need to segregate intangible assets
• The entitlement of each beneficiary must be certain
• The court can assist if the beneficial interest can be objectively assessed

Question 3

Certainty of Objects

Answer 3

• Fixed trust - it must be possible to compile a complete list of beneficiaries
• Discretionary trust - can it be said with certainty that any given individual is or is not a member of the class?

Question 4

Conceptual Uncertainty

Answer 4

• where words used to describe the beneficiaries is too vague - makes a trust void E.g ‘friends’

Question 5

Evidential Uncertainty

Answer 5

Where trustees are unable to determine who exactly fits the description due to lack of evidence

Question 6

Administrative Unworkability

Answer 6

Where definition of beneficiaries is too wide to form a class the trust will fail