The Main Concepts of Trust Laws - Essay Example

The Main Concepts of Trust Laws Introduction: It is assumed that the will, by which the 950 shares have been bequeathed to the Accountant, Tom, to be held in trust for Ben’s nephew, Andrew, is a written one, since, f Section 53 (1) (c) of the Law of Property Act 1925 categorically states that any verbal or non-written disposition of Equitable interest is void and unenforceable. According to this subsection, “a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same, or by his agent there unto lawfully authorized in writing or by will” (Property Law Act 1958. 2006). “The most fundamental duty that a trustee has is the duty of loyalty and an obligation to act solely in the interest of the beneficiary. (Mbote 2007, P. 7). Vandervill V IRC (1967) 2WLR 452 In the Vandervill v. IRC (1967) 2 WLR 87 case, the main issue that arouse was the question of the demarcation of legal and equitable interests. The Provisions of Section 53 (1) (c) is possible only when the legal rights and the equitable interests have been suitably demarcated at the time of passing of the interest. However, the Courts held that since, Vandervill had bypassed this requirement, by first transferring the shares to himself and then to the ultimate beneficiaries, and thus, the requirement for invocation of this section does not arise. (The Statutory requirement for the creation of the Trust. 2001). Wills Act Although the law is dealing with the Property Act it also extends to other aspects of equitable interest. Under the Section 5 (1) of the Wills Act, 1988, “ it is seen that every person may dispose by will, executed in accordance with this Act, of all real estate and all personal estate owned by him at the time of his death” (Wills Act 1988. 2005). In this case it is seen that a trust has been created in favour of Ben and he has nominated Richard to hold the 2000 shares in trust on his behalf. Through his written will, he has directed that 950 of the above shares may be bequeathed to his Accountant, Tom, to be held on behalf of his nephew, Andrew, the legal beneficiary of the gifted shares. In the decided case of Goldcorpe RE 1995, 1 AC 74, claims for non allocated bullion could not be enforced. Ordinary members of the public were inveigled into investing in non-existent bullion, on the strength of allotment letters given to them for staking their claim on future bullion. When Company subsequently went into liquidation, they claimed beneficial interest on future bullion on the basis of this allotment letter. The Courts held that the bullions were not earmarked and could not be enforced. (Swadling 1995). Saunders v.Vantier (1841) 4 Beav.115 In another decided case of Saunders v. Vantier(1841) 4 Beav.115, a trust was created that upon the death of the uncle, certain shares would be bequeathed to the nephew, along with its incomes, till he reached the age of 25. The nephew laid claim to the gift upon reaching the age of majority, i.e., 21 years. The Courts held that the validity of the gift had passed on from the uncle to the nephew upon his passing away, it being intended to be an immediate gift. Therefore, the claim for the property to the nephew from the uncle was passed on immediately upon his gaining majority age: (Theriault 2002). The case of Hunter v Moss (1994), whose decision was delivered before the Gold Corpe Re (1995) case, 1 AC 74.which relates to 50 shares of a total of 950, being verdicted to be a genuine trust, without uncertainty of matter, which was not considered in the case of Gold Corpe Case (1995). The Court of Appeals, in this case, validating the decisions of the High Court (1993) I WLR 934, stated that a statement of trust, of, effectively 50 shares out of a total number of 950 shares in a Company, could not be said to be a void contract, on the grounds of the uncertainly of subject matter; in this case the learned judged observed that allocation of particulars shall be considered superfluous since all the shares carry similar rights. (Moffat. P. 166). David Hayton has, however, subjected the judgment in Hunter v Moss (1994) to criticism, on the ground, that problem situations could arise, if part of the total was defective. Even though shares belonging to one class could be similar in nature, a problem could arise if a part of it was gained through duplicated free transfers. (Michaler P.129). However, it is seen that Ben dies before the real beneficiary, Andrew could lay claim on the gift bequeathed to him. “In general, the trustee of an express trust has a fiduciary duty to the beneficiaries, and the beneficiaries can seek to enforce that duty in the courts.” (Trust. 2006). Conclusion In this case, it are very strong indications that a trust has been established and B is the beneficial owner of 2000 shares held in Company x. Even though the nominee ownership lies with Richard, the virtual ownership is of Ben, being the trustee, and therefore it is possible for this transaction to be valid in Court of Law. The main question governing laws in the UK relate to right of ownership and it is the rightful owner who could dispose off the properties, in whichever manner he deems it fit and necessary to do so. There is nothing in this case which could prevent the trustee, Tom or at a later stage, Andrew, in enforcing this claim on the gift made by Ben, through a written will, as was decided in the leading case of Saunders v. Vantier (1841) 4 Beav.115, Bibliography MBOTE, Patricia Lameri (2007). Application of the Public Trust Doctrine over natural resources. Comment the use of the public trust doctrine in environmental law. Volume 3/2. P. 7. [online]. Law Environment and Development Journal (LEAD). Last accessed 11 December 2007 at: http://www.lead-journal.org/content/07195.pdf MICHELER, Eva. Property in Securities: A Comparative Study. 7.3.3.1: Indirect Holdings. Academic Commentary. Analysis. P. 129. Last accessed 10 December 2007 at: http://books.google.com/books?id=4Z-pyZuSfnQC&pg=PA129&lpg=PA129&dq=uncertainty+of+subject+matter+1994+hayton&source=web&ots=okPD2st8JD&sig=yqpqS4KCyEPJxQtsw7ikRN_FihI#PPA7,M1 MOFFAT, Graham. Trust Law. Creating the Trust 1. Text and Materials. P. 166. 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Last accessed 8 December 2007 at: http://www.bht.com/news/content/cst%20article.pdf Trust. (2006). [online]. The K Zone. Last accessed 8 December 2007 at: http://www.kevinboone.com/lawglos_Trust.html Wills Act 1988. (2005). Part 1: Wills. Property disposable by will. [online]. Commonlii. Last accessed 8 December 2007 at: http://www.commonlii.org/bm/legis/consol_act/wa198891/ Read More