The three certainties-express trusts-trust laws and accounts, Financial Accounting

The three certainties

A trust will be valid only if the three certainties are present i.e. certainty of words, certainty of subject, and certainty of objects.
 
1. Certainty of words

  • There is no need for a settlor to use the word "trust" in order to constitute a trust; it is enough if the words used in the instrument clearly establish an intention to create a trust.
  • The words must be imperative and not merely a request i.e. precatory words.(Re Adams and the Kensington Vestry)

 

 2. Certainty of subject matter

  • Where the property subject to the purported trust cannot be identified there will be no trust.  (Sprange v Barnard).
  • Where the beneficial interests to be taken by the beneficiaries are not certain, the trust will a resulting trust for the settlor (Boyce v Boyce).

 
However there is no uncertainty in the following cases:-

  • Where the trustees are empowered to determine the beneficial interest to be enjoyed;   
  • Where the court is able to apply the maxim "Equality is Equity", and divide the property into equal shares.

 

3. Certainty of objects

The objects of a trust must be certain i.e. a trust will only be valid if it can be said with any certainty that any given individual is or is not a member of the class of beneficiaries. Generally, trusts which fail to meet this requirement are void for uncertainty.

Charitable trusts constitute an exception to this rule. However, such trusts do fail if the gift in not exclusively for charitable purposes (Re Astor's Settlement Trusts).

Posted Date: 12/13/2012 5:52:04 AM | Location : United States







Related Discussions:- The three certainties-express trusts-trust laws and accounts, Assignment Help, Ask Question on The three certainties-express trusts-trust laws and accounts, Get Answer, Expert's Help, The three certainties-express trusts-trust laws and accounts Discussions

Write discussion on The three certainties-express trusts-trust laws and accounts
Your posts are moderated
Related Questions
The following items are found in the trial balance of M/s Sharada Enterprise on 31st December, 2000. 10 marks Summer 2013 Sundry Debtors Rs.160000 Bad Debts written off Rs 9000 Dis

What two components are used to compute the return on assets ?

Content of accounts Periodical accounts should normally consist of:         1.    Balance sheet of the whole trust;         2.    Capital account;         3.    Income account

Assertion -Implicit or explicit representations by an entity's management which are embodied infinancial statement components and for which AUDITOR obtains and evaluates evidential

RECOMENDATION REGARDING THE CURRENT SOUTH AFRICAN VAT SYSTEM

Oswald Corporation reported the following information on operations for 2009: Revenue = $2,000 Cost of goods sold = $850 Operating expenses =$395 Depreciation =$248

March and has already accumulated $30,000 in manufacturing costs, Job B and order for 10,000silver medallions, was not started until April. Transactions for these jobs are the foll

Q. Show the Management Report? Management's Report - Management is essential to include in its annual report its assessment of the effectiveness of the company's internal contr

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 disclose

Q. Credit Reference Agencies and Credit Scoring ? A several organisations example Dun & Bradstreet and Standard & Poor provide credit scores and ratings for companies. These ma