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Equity and Trusts

Explore equitable interests, trust variation, and valid trust creation through wills. Learn beneficiaries' rights and how to structure trusts effectively. Adequately advise trustees on beneficiaries' demands.

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Equity and Trusts

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  1. Equity and Trusts Lecture 2 Equitable interests. Creation of will trusts.

  2. Lecture 2 Outcomes • Review what beneficiaries with various equitable interests get • Use a structured approach to determine whether beneficiaries can vary/end a trust • Outline the validity requirements for a trust created by will

  3. Equitable interests – What do beneficiaries get? (a) Deceased’s will left property on trust ‘for such of my children as attain the age of 21’. Children: Alice (22), Ben (19) and Cara (6). (b) Trust for Xavier for life remainder to Yasmin.

  4. Discretionary trust for such of my nephews and nieces as my trustees shall select. • Stockbroker holds shares as a nominee for client.

  5. Can the beneficiaries end the trust? Saunders v Vautier All beneficiaries • are in existence and ascertained • aged 18 or more and of sound mind and • they all agree.

  6. Application of Saunders v Vautier 1 Trust for my grandchildren whenever born. Settlor has 2 children (aged 45 and 40) and 2 grandchildren aged (19 and 18). 2 Discretionary trust for A, B and C. 3 Trust in a will of residue for Gary if he attains the age of 23. Gary is 21.

  7. 4 Trust in a will for Gary if he attains the age of 23 but, if he does not, for Kate. 5 Henry’s will left his estate to such of his children as attain the age of 25, and, if more than one, in equal shares. Henry left three children, Alex (25), Bella (21) and Chris (19).

  8. Practice Question Ivan has just died. In his will he left his estate on trust for his widow, Jane, for life, remainder to be divided equally between his children if they should attain the age of 21, but, if either or both children should not attain 21, then their share to pass to the NSPCC. Ivan had two children: Keir, who is now aged 22, and Laura, who is now aged 18. Ivan’s estate is worth £800,000 and comprises shares in quoted companies and cash in banks and building societies.

  9. Jane would like £40,000 from the trust to pay for improvements to her house. Keir wants £50,000 from the trust to buy a share in a business. Laura has gone to university and wants £20,000 to pay for her expenses. Advise the trustees, Adam and Belinda, on the following questions: (a) What should they do with the trust property? (b) Can the beneficiaries demand the sums they have requested?

  10. How to make valid gifts and trusts in a will • Legacy: ‘I give my paintings to Mary’.

  11. Will trust I GIVE all the rest of my real and personal property whatsoever and wheresoever not otherwise disposed of by this my will to my Trustees UPON TRUST (a) for my brother Benedict Brown for life, and (b) after his death for his son Gerald Brown absolutely if he shall attain the age of 21, and …

  12. A trust interposes trustees to hold the property for the benefit of the beneficiaries. Requires: • transfer of property to the trustee and • declaration of trust by settlor/testator.

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