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Additional resources for Course Notes: Equity and Trusts
2 Why are they so important? s Persons receiving a gift need to know if they own it absolutely or on trust for another. s The parties need to know what property is the subject of the trust. s Beneﬁciaries need to know their respective rights and interests. s Trustees need to know the beneﬁciaries and how to identify them. 3 Certainty of intention Key Point The essence of a trust is that ownership is split. The trustee has the legal title and the beneﬁciary the beneﬁcial title. The wording to create the gift must therefore split the title or there is no trust.
I understand that the protective trust: s is a hybrid between the ﬁxed and discretionary trusts s only protects the income not the capital s commences as a ﬁxed trust in favour of the principal beneﬁciary. I understand that when an event such as bankruptcy of the principal beneﬁciary occurs then the income is held on a discretionary trust – for the principal beneﬁciary, his/her spouse and issue. I also understand that other types of private trusts exist. 1 Trusts and contracts The distinctions: s A contract is based on agreement between two parties usually operating at arm’s length without ﬁduciary responsibilities.
S The doctrine of precedent also applied to previous decisions in equity (Gee v Pritchard (1818)). s A litigant who wanted a legal and an equitable remedy would have to apply to both the common law courts and the equity court, or alternatively might have applied to the wrong court and had the case dismissed, so: s The Judicature Acts 1873–1875 fused the administrative systems of law and equity together. s It did not fuse law and equity together: the two are still separate but run ‘side by side’.