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
Comprehensive Basis of Accounting (OCBOA) - Consistent accounting basis other than GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) used for financial reporting. Illustrations compr

1. A fellow student says to you: "The statement of cash flows is the easiest of the basic financial statements to prepare because you know the answer before you start. You compare


RECEIVING ORDER It includes five main important points as follows: Effect of receiving order: The consequences of the making of the receiving order are:The debtor retain

Explain the Transaction Exposure versus Economic Exposure? In brief describe the following term: a) Spot market and forward market.  b) Purchasing Power Parity or PPP.

How should I handle Booking an invoice in one month for Raw material that has not been received until the following month?

Copper Suppliers, Inc. (CS), is a distributor of commercial grade copper. CS purchases copper directly from copper mines and then after refining it, sells the refined copper to in


Q. What do you understand by Exempt Organization? Exempt Organization - Organization that is normally exempt from paying federal income tax. Exempt organizations comprise relig

The purchase of a car needs a $23,410 loan to be repaid in monthly installments for 4years at 12% annual real interest rate. If annual inflation rate is 4%, find the extra amount t