Half secret trusts-secret trusts-trusts laws and accounts, Financial Accounting

Half secret trusts

In this type of trust the will states that the gift is on trust, but the name of the beneficiary is not specified. Since the existence of a trust is disclosed, the trustee is unable to claim the property for himself. The following points should be noted:-
 
1) Evidence tending to establish a half-secret trust is inadmissible if it contradicts the terms of the will (Re Keen);

2) Communication of the trusts to the trustees will be ineffective if it takes place after the will has been executed (Johnson v Ball);

3) Where there is no proper communication to the trustees, the property belongs to the residuary legatee or, if no such person, the testator's next of kin (Johnson v Ball).

Note: Secret trusts operate outside the will. Thus:

  • A beneficiary under a secret trust does not lose his interest if he witnesses the will or if he predeceases the testator;
  • Where a secret trustee predeceases the testator, the legacy and the trust fail.
Posted Date: 12/13/2012 6:00:12 AM | Location : United States







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