905395
| Question | Answer |
| Parker and Mellows | ''The evidence of communication, acceptance and terms of the secret trust in question will be either oral or contained in a document which has not been properly signed and attested. The existence of secret trusts therefore involves a departure from both the letter and the spirit of the Wills Act..'' |
| Crook | These are testamentary trusts that usually arise in circumstances where the settlor leaves a legacy in his will on the secret understanding that the legatee will hold that property on trust for a third party |
| Fully Secret Trusts | where the existence of a trust is not disclosed on the face of the will and the legacy appears to be absolute, caters well for an indecisive testator who cannot make his mind up as to what property to leave to whom |
| Watkin | Doctrine may be abused by the testator who is undecided rather than secretive |
| Half secret trust | where the existence of a trust is revealed in the will, but the beneficiary remains undisclosed |
| Megarry in Re Snowden | The whole basis of secret trusts... is that they operate outside the will, changing nothing that is written in it, and allowing it to operate according to its tenor. |
| Re Keen | If the terms of the trust are not communicated either before, or at the latest, contemporaneously with the will, there can be no half-secret trust |
| As Brightman J in Ottoway | (secret trust evidence) - precautionary measures if a will contains a gift which is in terms absolute, clear evidence is needed before the court will assume that the testator did not mean what he said |
| Ottoway (case) | By will, Harry left his bungalow, half of his residuary estate and £1,500 to his housekeeper, Hodges. Before his death, it was orally agreed that she would, in turn, leave by her will the bungalow and whatever money was left to Harry's son – William. William commenced proceedings against Mr Hodges executor for a declaration that the appropriate parts of her estate were held by him on trust for William. The fully secret trust in relation to the bungalow was upheld, but not in relation to money. The terms of the trust as regard the money were too unclear, meaningless and unworkable. |
| Ottoway -Brightman 3 vital ingredients for a secret trust | 1. Intention of the testator to subject the primary donee to an obligation in favour of the secondary donee. 2. Communication of that intention to the primary donee. 3. The acceptance of that obligation by the primary donee either expressly or by acquiescence. It is immaterial whether these elements precede or succeed the will of the donor''. |
| Re Snowden | Fully secret trust - intention the testatrix bequeathed her estate to her brother with the rider that ''he shall know what to do''. The High Court held that the deceased had shown the intention only to impose a moral obligation on her brother. With the words used, there was no certainty of intention to create a secret trust. Did not reveal the intention to create a secret trust and thus, the legatee could keep the money absolutely. |
| Moss v Cooper - wood | Communication can also occur via the testator's agent. where one of the secret trustees, acting on behalf of the testator, communicated the trust to the other two secret trustees - Communication may occur either before or after the will is drafted |
| Re Keen | Communication (half-secret) The testator made his will and this disclosed the existence of a secret trust relating to the sum of £10,000. The trustee was handed a sealed envelope that contained the name of the secret beneficiary. The letter was not to be opened until after the death of the testator. The trustee had the means of ascertaining the identity of the beneficiary and this amounted to a sufficient communication |
| Proby | In relation to a fully secret trust, communication must be made during the lifetime of the testator (it must be made inter vivos). |
| Wallgrave | Communication (full secret) the testator left £12,000 in his will jointly to Mr Tebbs and Mr Martin. After the testator's death, a draft letter was found specifying how the testator wanted them to hold the money. The court held that, because there had been no communication of this to Tebbs and Martin before the testator's death, there could be no binding trust. Tebbs and Martin could therefore keep the money |
| Re Boyes | (full secret) the testator told the intended trustee that he was going to leave him property to be applied under a secret trust. However, the terms of the trust did not communicate within the testator's lifetime. After the death of the testator, two documents addressed to his trustee (solicitor) were discovered and directed the solicitor to hold the property on trust for the deceased's mistress and illegitimate child. The High Court held that this postmortem communication of the terms of the trust were insufficient. The solicitor could not keep the property for himself and instead, held it on resulting trust for the deceased's estate. The trustee must be offered the opportunity to refuse to act as the testator would wish |
| Re Gardner | If the trustee refuses, the testator can then make another will and leave the property to some other person willing to act as trustee |
| Re Stead - Farwell The court has devised a somewhat elaborate approach to deal with this type of scenario (concurrent trustees) which concentrates upon how the trustee hold the property and the timing of communication to those trustees who were aware of the trust - Perrins | (secret trusts) 1. If the property is left to the legatees as ''tenants in common'', so that each has a separate share, only those with whom the testator has communicated will be bound by the trust. 2. If the property is left to the legatees as ''joint tenants'', so that they own the property together as a single entity and have no distinct shares, and the testator communicates with any of them prior to execution of the will, all three legatees are bound by the trust. 3. If the legatees are ''joint tenants'', and the testator's only communication with them occurred after the execution of the will then only those who were so communicated with are bound. - argues that it is contradictory, the trust should be only binding on the trustee that has only been communicated with. |
| Re Keen | (half secret) As regards to half-secret trusts, communication must occur either before the will or, at the very latest, when the will is created. The legatee will hold the property on resulting trust for the testators estate. Must be described that it was established prior or at least contemporaneously with its execution |
| Re Keen - Re Spence | Back to half-secret trusts. If a trustee has not been communicated with, his share (co-trustees under a half-secret trust always hold as tenants in common) will either project forward for the benefit of the secret beneficiary or result back to the estate of the testator. It all depends upon the wording of the will. If the will expressly allows communication to ''all or any'' of the trustees, the communication to one trustee will bind all the co-trustees and the half-secret trust will be upheld. Writing in will "any" and in practice communicated 1 = secret trust is valid. - Writing in will "all" but in practice not = fails |
| McCormic | Assent Acceptance can be made at any time before the testator's death. This is done either by express agreement or by implication from silence. Assent can occur, as Lord Westbury said in McCormick, ''either expressly or by any mode of action which the disponee knows must give to the testator the impression and belief that he fully assents to the request'' |
| Re Sharman -Half -Full | - Accepted trust, testator dies, don't want to be a trustee any more. Representatives will hold the property on trust for the secret beneficiary. - Will be upheld. A refusal after the death of the testator to give effect to it would be a fraud on the part of the legatee |
| Whitton -Half-secret -full | Revoking acceptance while testator is alive - failure to appoint new trustee to the will, result back to the testator's estate -failure to appoint a new trustee to the will, trustee gets the property |
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