surreptitious self-confidences arise where a testate explains to X that they want space to be held on depone for Y and then leaves the berth to X in their leave alone. It is also practicable that a unfathomable trust arises where in reliance on a promise to implement the trust by X, no exit is made (Strickland v Aldridge 1804 9 Ves 516 ref1).
The onus of proving a hole-and-corner(a) trust is on the person claiming that it exists, on the proportion of probabilities - the ordinary civil standard of proof (Re Snowden 1979 3 solely ER 172 REF2).
thither argon three elements necessary for a cloak-and-dagger trust (Ottaway v Norman (1971) 3 all ER 1325 REF3).
Intention
The testator must(prenominal) intend that the proportion be used in accordance with a direction. This must be intended as a binding obligation on the legal guardian, non scarcely an unfettered discretion. (Re Snowden (REF2), McCormick REF44, Margulies v Margulies and others [2000] All ER (D) 344 REF4 on precatory words).
Communication
The testate must communicate their intention to the intended trustee, along with the ground of the trust. An ex adeninele whitethorn be a cockeyed windbag to be opened on the testators death, provided that the intended trustee knows the property is to be dealt with in accordance with the contents of the envelope (Obiter in Re Boyes (1884) 26 ChD 531 REF5, and confirmed in Re Keen 1937 Ch 236 REF6). A mere request to hold as instructed by either papers left with the will would not amount to acceptable communication.
Oral communication is effective yet in the miscue of a half secret trust, must be consistent with the terms of the Will (Re Keen REF6). If nevertheless the intended trustees do not find out slightly the intentions until after the testators death, on that point will be no secret trust (Wallgrave v Tebbs 1855 2 K & antiophthalmic factor; J 313 REF7).
Agreement
There must be agreement or acquiescence, including placid acquiescence (Moss v Cooper 1861 1 John & antiophthalmic factor; H 352 REF8) of the intended trustee, which may be express or implied (Wallgrave v Tebbs 1855 REF7).
If there is no evidence of the trust in the Will, the trust is fully secret. If there is evidence in the Will exclusively no indication of the terms or the final beneficiary, it is half secret.
Fully secret trusts pack communication and adoption before the death of the testator - half secret trusts require communication (including the terms) and acceptance before the proceeding of the Will. This avoids a Testator merely naming a trustee and deciding terms later with unwitnessed testamentary dispositions, thus choosing to ignore the requirements of the Wills spell 1837 (REF9) entirely (Blackwell v Blackwell 1929 REF10, ex adeninele in Clause 5 of the Will in Re Keen 1937 REF6). It is however difficult to substantiate the difference between this and a fully secret trust, where the testator hind end choose his secret beneficiary at any time up to his death - surely also ignoring the nourishment of the Wills hazard.
movement of invests - Usual Rules
Usual rules for testamentary formality atomic number 18 found at s9 of the Wills actuate (as amended by the tribunal of Justice Act 1982 s.17) and for trusts at s.53(1) justice of Property Act 1925. (12)
Execution of arcanum Trusts
There is however a conflict as secret trusts and half secret trusts do not contain to be made in opus/by deed. The legitimate defense of this was based on the honest maxim - legality will not allow a code to be used as an instrument of fraud. Where the Testator clearly did not intend to make an outright gift to X and without admission of oral or other evidence such a gift may be fraudulently obtained (thus using the ordinance to exclude clear evidence of the Testators true intention), it may be submitted subject to s.7 Statute of Frauds 1677 (now s.53(1) LPA) - Critchley p.21, interlingual rendition 6 (REF13).
Do secret trusts operate outside the Will?
The more recent chance is that there is no such conflict between s.9 Wills Act and secret/half secret trusts because they operate outside the will (dehors - unit 24 p.41 REF14) and change nothing that is written in it (Re Snowden 1979 2 All ER 172 REF2).
This is difficult to grasp as with a fully secret trust, the Will states that the gift to X is outright and only the terms of the trust alter this. Pearce and Stevens betoken that the trust is uncompletely constituted until the death of the testator. The agreement and acceptance to hold the property on trust take place inter vivos scarcely the trust comes into effect when on death, the Will transfers legal backing to the trustee (Pearce & adenosine monophosphate; Stevens, exercise 14, REF15). Whilst this is a strong argument, the formalness requiring half secret trusts to be communicated and accepted prior to the execution of the Will so as not to ignore the Wills Act, seems incompatible with the view that secret trusts operate outside the provisions of the Wills Act entirely.
be secret trusts necessary to veto fraud?
The adaptation of secret trusts avoiding the requirements of the Wills Act is said to be made to prevent fraud. A trustee agrees to hold property on trust and a gift is made to him on that basis (Re Boyes, REF5). To maintain absence of the Wills Act formalities as a self-renunciation and thus claim the gift is outright, would be to use statute as an instrument of fraud, and would be against the equitable maxim. Maudsley disagrees, pointing out that with a half secret trust, fraud is rarely an issue as the trust is apparent from the Will and there is no guess that the legatee can keep the Property (although the intended beneficiary may not get it where terms are not clear) - (Maudsley, pg. 116 REF 16). Where the terms of the trust have not been communicated properly but the trust is proved to exist (Re Boyes, REF5), the legatee will hold the property for the benefit of the residuary beneficiaries or those en claimd under intestacy rules. Maudsley consequently concludes there is no possible excuse for the intervention of faithfulness to save a disposition from the impact of the statute.
atomic number 18 secret trusts consistent with policy and other law?
Secret trusts appear to create a gap in the concentration of the law with regard to testamentary dispositions and are therefore arguably against policy. Where arguments arise that the formalities of the Wills Act operates against the intended beneficiaries, Maudsley argues that many statutes do this and equity does not interfere in every case (Maudsley, pg. 116 REF 16). Moffat follows this argument, querying that if secret trusts are express trusts as has been implied, are such secret trusts containing land required to be in writing under LPA1925 s.53(1)(b) (Moffat p.119-120, REF17)? Sheridan (1951) (REF18) suggests that half secret trusts are express (and so LPA1925 s.53(1)(b) applies) but fully secret trusts are constructive, avoiding the provisions of s.53(1)(b). This brings us back to the original justification - should half secret trusts, if express, be enforced even if they dont comply with s.53 on the original case of prevention of fraud? Hodges argues in relation to formalities that, if the testator is content in complying with the formalties of the Wills Act to transfer the legal title to the secret trustee (in a half secret trust), wherefore should they be allowed to (or want to) avoid them in relation to the equitable interest? (Hodge, D. R. - rendering 10 REF19) There seems to be puny logic for avoidance of formality for half secret trusts.
Are secret trusts testamentary in character?
In examining the nature of the secret trust, Critchley points out that the arrangement has no effect and confers no interest before the testators death - therefore, the trust is surely testamentary rather than inter vivos, and ought to comply with s.9 Wills Act 1837 (and indeed, s.15). Hodges agrees the disposition of property under a secret trust is testamentary in nature, noting that the trust takes effect only upon the vesting under the Will of the trust property and that it shares the characteristics of a gift under a Will as it can be revoked or altered at the whim of the Settlor (Hodges, Reading 10 REF19).
Secret trusts are arguably useful as a will is public document and a testator may wish to keep a gift secret from family perhaps to avoid upset. They also offer flexibility - property can be left to trusted friend or solicitor whilst retaining ability to decide on ultimate distribution. However, there seems to be a large division in public opinion between the rules for secret trusts and half secret trusts. It is helpful to recall the purpose of formalities laid down in the Wills Act and similar formalities such as contained in the shore up Registration Act, which are there to avoid the possibility of doubt, irresolution and fraud (Hodges p.39 Reading 10 REF19). It seems clear there is no justification for this loophole in the law - if secret and half secret trusts are accepted, why not accept improperly executed wills and incomplete land transfers? Adopting a purposive approach, modern legislation is in place to protect both testators and beneficiaries from fraud - it seems illogical, unjustified and irreconcilable that the secret trusts should be allowed to escape the provisions of such legislation.
1297 words
References:
1) Strickland v Aldridge 1804 9 Ves 516 cited in Re Boyes (1884) 26 Ch D 531, Reading 7 - option intelligence 4 units 23 - 32 - W301: equity: monomania & angstrom unit; trusteeship - rights & axerophthol; responsibilities, The control surface University, Milton Keynes
2) Re Snowden 1979 3 All ER 172 in Moffat, G. Trusts integrity - textual matter and Materials (3rd Edition, 2002) pg.129, Butterworths/LexisNexis.
3) Ottaway v Norman (1971) 3 All ER 1325 quoted in Moffat, G. Trusts righteousness - text edition and Materials (3rd Edition, 2002) pg.114, Butterworths/LexisNexis.
4) Margulies v Margulies and others [2000] All ER (D) 344 found online using ixquick.
5) Re Boyes (1884) 26 ChD 531 - Reading 7 - Resource platter 4 Units 23 - 32 - W301: fair play: monomania & trust territory - rights & responsibilities, The slack University, Milton Keynes
6) Re Keen 1937 Ch 236 Moffat, G. Trusts police force - textual matter and Materials (3rd Edition, 2002) pg.114, Butterworths/LexisNexis.
7) Wallgrave v Tebbs 1855 2 K & J 313 in Hayton, D. J. Hayton & Marshall interpretation and Cases on The Law of Trusts and equitable Remedies (11th Edition, 2001) pg.107, Sweet & Maxwell, capital of the United Kingdom
8) Moss v Cooper 1861 1 John & H 352) cited in Moffat, G. Trusts Law - textual matter and Materials (3rd Edition, 2002) pg.114, Butterworths/LexisNexis.
9) Wills Act 1837 in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.113, Butterworths/LexisNexis.
10) Blackwell v Blackwell 1929 AC 318 (HL) in Hayton, D. J. Hayton & Marshall rendering and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) pg.111, Sweet & Maxwell, London
12) Re Edwards 1948 Ch 440 - cant figure where I found this case, perhaps found online?
13) Critchley, P.
Instruments of Fraud, testamentary Dispostions and the Doctrine of Secret Trusts (1999) cxv LQR 631 - Reading 6 - Resource Book 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
14) Unit 24 - Secret Trusts and Mutual Wills - A: Secret Trusts, manual of arms 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
15) Pearce & Stevens, The Law of Trusts and Equitable Obligations (2nd Edition, Butterworths) pp.324-326 - Reading 14 Resource Book 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
16) Maudsley, R. H. Incompletely Constituted Trusts in R Pound (ed) Perspectives of Law (1964) pp254-256, in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.116, Butterworths/LexisNexis.
17) Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) Butterworths/LexisNexis.
18) Sheridan (1951) as for 12, - cant figure where I found this case, perhaps found online?
19) Hodge, D. R. Secret Trusts: The Fraud Theory Revisited (1980) Conv 341- Reading 10 Resource Book 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
20) Re Young 1951 1 Ch 344 - Reading 9 Resource Book 4 (pg.33) Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
21) s.15 Wills Act 1837 Reading 9 Resource Book 4 (pg.33) Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
22) s.33(1)(i) Trustee Act 1925 in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.213, Butterworths/LexisNexis.
23) Re Walker (1939) Ch. 974 in Hayton, D. J. Hayton & Marshall rendering and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) conservation of parity 4.92 - 4.112, Sweet & Maxwell, London
24) Re Stonehams closedown 1953 Ch 59 (p.85) Unit 25 Control of Trusts: Control of Trustees - B: Appointment, Retirement and removal of Trustees, Manual 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
25) Re beloved Wilkes Charity (1851) 3 Mac & G440 in Hayton, D. J. Hayton & Marshall remark and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) mirror symmetry 9-319, Sweet & Maxwell, London
26) Hayton, D. J. Hayton & Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) mirror symmetry 9-319 - 9-320, Sweet & Maxwell, London
27) s.19 TLATA 1996 in Hayton, D. J. Hayton & Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) para 8-17, Sweet & Maxwell, London
28) Saunders v Vautier (1841) 4 Beav 115 in Hayton, D. J. Hayton & Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) para 9-154, Sweet & Maxwell, London
29) Unit 23 Discretionary and Protective Trusts - B: Protective Trusts, Manual 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes.
30) s.33 Trustee Act 1925 in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.213, Butterworths/LexisNexis.
31) Re Smith (1928) Ch 915, Hayton, D. J. Hayton & Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) para 4-98, Sweet & Maxwell, London
31) s.310 Insolvency Act 1986
33) Klug v Klug (1918) 2 Ch 67 cited in Unit 25 Control of Trusts: Control of Trustees - D: Controlling the Trustees, Manual 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes
34) Scott v National Trust (1998) 2 All ER 1936 discussed in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.427 and Chapter 13, Butterworths/LexisNexis.
35) s.8(1)(b) Trustee Act 2000 cited in Hayton, D. J. Hayton & Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) para 9-124, Sweet & Maxwell, London
36) Khoo Tek Keong v. Chng Joo Tuan Neoh (1934) AC 529 cited in Hayton, D. J. Hayton & Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) para 9-125, Sweet & Maxwell, London .
37) Re Manistys Settlement (1917) Ch 17 used in Hayton, D. J. Hayton & Marshall Commentary and Cases on The Law of Trusts and Equitable Remedies (11th Edition, 2001) para 9-208 onwards, Sweet & Maxwell, London
39) Vestey v IRC (No 2) [1979] Ch 198 at 206, [1979] 2 All ER 225 at 235, DC, per Walton J; affd [1980] AC 1148, [1979] 3 All ER 976, HL - butterworths/halsburys online.
40) s.1(1)(a) regeneration of Trusts Act 1958
41) Re Tinkers Settlement (1960) 1 WLR 1011 cited in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.267, Butterworths/LexisNexis.
42) Knocker v Youle 1986 2 All ER 914 cited in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.263, Butterworths/LexisNexis.
43) Unit 25 Control of trusts: Control of Trustees - A: Variation of Beneficial Interests, Manual 4 Units 23 - 32 - W301: Law: Ownership & Trusteeship - rights & responsibilities, The Open University, Milton Keynes.
44) McCormick v Grogan (1869) LR 4 HL 82 quoted in Moffat, G. Trusts Law - Text and Materials (3rd Edition, 2002) pg.113, Butterworths/LexisNexis.
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