Deck 3: Certainty

Question 1

The question of certainty of intention is intertwined with the question of whether an obligation is a trust or a power. In explaining the difficulties of distinguishing whether a settlor has intended to create a trusts and powers as distinct obligations, which of the following statements is false?

A) There is now little difference between a trust and a power.
B) Powers are normally given to trustees, so that trusts and powers may be exercised by the same person and may be conferred by the same instrument.
C) The boundary lines between trusts and powers have become blurred.
D) It is difficult to determine from the words used by the settlor in the instrument whether a trust or a power is intended.

Answer 1

A

Question 2

Which of the following statements is correct in relation to certainty of intention to create a trust? (Think carefully)

A) Failure to demonstrate an intention to create a trust means that either the property will stay with the settlor or, by will, passes to the intended recipients free of the trust.
B) Precatory words, such as 'desire', will demonstrate the intention to create a trust,.
C) The intention to create a trust is demonstrated by using the word 'trust' in the wording used by a settlor.
D) Intention to create a trust is a matter of construction only, not a matter of evidence.

Answer 2

A

Question 3

Errol, in his home-made will, leaves 'ten of the most expensive pieces of crystal' to be held by Jonathan, his trustee, 'in the hope and expectation that he will distribute them to such of my needy, old University friends who survive me, as Jonathan in his absolute discretion shall decide.' In relation to certainty of subject matter, which of the following statements is correct?

A) The trust is likely to be held certain, as 'ten of the most expensive pieces of crystal' is ascertainable by Jonathan.
B) The trust is likely to be held uncertain, as Errol has failed to physically segregate the particular pieces of crystal that are to be subject to the trust, which are tangible property.
C) The trust is likely to be held certain, but only because Errol has designated 'ten' as the number of pieces of crystal, which solves any question of uncertainty because 'ten' is objectively determinable.

Answer 3

A

Question 4

Belinda, in her home-made will, leaves 'ten of my most precious pieces of crystal' to be held by Janis, her trustee, 'in the hope and expectation that she will distribute them to such of my needy, old University friends who survive me, as Janis in her absolute discretion shall decide.' In relation to certainty of subject matter, which of the following statements is correct?

A) The trust is likely to be held certain, as 'ten of my most precious pieces of crystal' is ascertainable by Janis.
B) The trust is likely to be held uncertain, as Belinda has failed to physically segregate the particular pieces of crystal which are to be subject to the trust, which are tangible property.
C) The trust is likely to be held certain, but only because Belinda has designated 'ten' as the number of pieces of crystal, which solves any question of uncertainty because 'ten' is objectively determinable.
D) The trust is likely to be held uncertain, as 'most precious' does not provide an objective means of determining what pieces of crystal are to be held on the trust.

Question 5

The House of Lords decision in McPhail v Doulton was a watershed case. Which of the following statements does not reflect the changes it brought to the law?

A) The decision completely removed the distinction between trusts and powers, treating them both as obligations on the trustee.
B) The decision altered the test of certainty of objects for a discretionary trust, making the test similar to powers.
C) Enforcement of a trustee's obligations was no longer simply through equal division between the beneficiaries and a trust, but could be specified in court order.
D) The decision reduced the need to categorise an obligation as either trust or power.

Question 6

Errol, in his home-made will, leaves £80,000 to Jonathan, to be distributed under a discretionary trust to 'such of my, needy old University friends who survive me, as Jonathan in his absolute discretion shall decide.' In relation to certainty of objects, which of the following statements is correct?

A) The trust is likely to be held certain, as there is a class of persons named, and it will be possible to show that at least one potential person will fall within the class.
B) The trust is likely to be held uncertain, as the words used to define the class are not defined with sufficient certainty.
C) The trust is likely to be held certain, as there is a clear class of potential objects from which Jonathan can select.
D) The trust is likely to be held uncertain, as it is not possible to know at the time the trust is created which friends will survive Errol.

Question 7

Ethel, in her home-made will, leaves all her jewellery to be held by Mark, her trustee, to distribute it to 'such of my needy old University friends who survive me, as Mark in his absolute discretion shall decide.' In relation to certainty of objects, which of the following statements is correct:

A) The trust is likely to be held uncertain, as there is no fixed list of all the potential beneficiaries provided.
B) Whether the trust will be held certain or not is dependent on whether there is evidential certainty as to how a potential object would prove they were within the class of objects.
C) Whether the trust will be held certain or not is dependent on whether the words create a conceptually certain class of persons from which Mark can select.
D) Whether the trust will be held certain or not is dependent on whether the criteria upon which Mark selects the potential beneficiaries is capricious or not.

Question 8

Merril, in his will, left a fund to Danita, 'to hold it on discretionary trust, and to distribute it among my children in any share as Danita in her absolute discretion thinks fit.' Merril has four adult children, Berlye, Ethel, Cerele and Harry. Merril has now died. Which of the following statements is true in relation to the four children's beneficial entitlement to the fund?

A) Individually the children cannot identify any share in the fund until it is allocated to them by Danita, but collectively they have proprietary rights to the fund.
B) The children have no beneficial entitlements until Danita makes a distribution under the trust.
C) The children are immediately entitled to a one quarter interest in the fund each, as Merril has died and Danita is now the trustee of an active trust.
D) The children collectively own the whole beneficial ownership of the fund, and are also immediately entitled to a one-quarter interest individually, unless and until Danita alters the shares by making a distribution.