Discretionary Trust Essay Example | Topics and Well Written Essays - 3500 words

Discretionary Trust - Essay Example on that point are four requirements of a trust, which are capacity formality demonstration and genius, each factor is important in creating a valid trust and in order to determine the validity of each disposition within the give these requirements mustiness be fulfilled.This requirement concerns the creator and beneficiary of the trust whereby any soulfulness can create a trust if thy have the ability to avow any type of property, with four exceptions minors whom cannot own land therefore cannot create a trust of land but can be a beneficiary of a trust until the appropriate age any mentally disordered person under the 1983 Mental Health Act cannot create a trust but can be a beneficiary of a trust corporations can only create a trust if there is a power in their memoranda of association and statutory bodies can only create a trust if there is this power within the enabling legislation. There are also limitations to two further types of bene ficiaries which are non-citizens of Britain whereby they can hold a trust in any property but British ships and aircrafts and trustees who cannot be the sole beneficiary and sole trustee. However the general rule is that any person who has the capability of owning property can create or be a beneficiary of a trust. FormalityGenerally trusts can be created in any manner, because equity deals with the substance of the trust not its formal requirements. Therefore as long as the creator of the trust makes their intentions clear then a trust will be upheld by the courts. However a trust in land is a different situation whereby it must comply with the Law of Property Act 1925 section 53(b) and 53(c) for existing equitable interests in land whereby a declaration of trust respecting any land or interest therein must be manifested and proved by writing signed by the person who is able to declare such trust or by his will (LPA 1925 53(b)). It will it is assumed that it meets the formal requir ement because there is no information to the opposite however it must be kept in mind that if the formal requirements were not met then it would not be a valid trust, when considering the dispositions certainty and constitution will be the main focus to ensure the trusts in the will can be upheld. However there may be a job with the transfer formalities of the shares, which will be discussed with reference to the constitution of the trust. CertaintyThe creator of the trust must make his intentions clear when creating his trust he must make it clear which property is subject to the trust and finally he must identify the beneficiary of the trust. In Wright v Atkyns1 it was determined that the words must be imperative, but there does not have to be created with the word trust or obligation2 but sufficient intention must be unornamented from conduct and words3. The court will always aim to impose a trust as long as the intention of the creator is present. In copulation to the subjec t of the trust this also must be clearly stated, whereby the exact size and amount of the subject matter is clear, e.g. the bulk of my estate4 is not clear