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Discretionary Trust - Essay Example
A trust is a tool of equity to ensure that the intention of the creator of the trust is fulfilled and in the case of constructive trusts the courts use this tool to ensure that justice is fulfilled. The problem that the law commission is discussing refers to the formalities that surround the creation of trusts, disposition of equitable interests and transfer of certain types of trust property that sometimes causes uncertainty of law and/or inequity to happen…
There are four requirements of a trust, which are capacity; formality; certainty and constitution, each factor is important in creating a valid trust and in order to determine the validity of each disposition within the will these requirements must be fulfilled.
This requirement concerns the creator and beneficiary of the trust; whereby any person can create a trust if thy have the ability to own 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 beneficiaries 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. ...