CLASSIFICATION OF TRUSTS 2012.doc

CLASSIFICATION OF TRUSTS 2012.doc - J.K ASIEMA GPR 310 LAW...

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J.K. ASIEMA GPR 310 LAW OF TRUSTS 2012 CLASSIFICATION OF TRUSTS There is no general agreement on the proper classification of trusts. However, the important classifications are the following: 1. Express Trust This is a trust created by the express declaration of the owner of the property, e.g. where X conveys property to Y on trust for Z. There is a deliberate intentional declaration by the Testator to create the trust. 2. Resulting, Implied or Presumptive Trust A resulting trust exists where property has been conveyed to another, but the beneficial interest returns, or ‘results’ to the transferor. This trust arises from the unexpressed but presumed intention of the owner of the property. It is applied to three categories: (a) Where a person, A, provides money to purchase prop erty and the property is, by his direction, registered in the name of another person, B. This may occur, for example in an auction sale where B is deemed to be a nominee. A may also have the property registered in the joint names of himself and B. There is no intention that the property should benefit B. B is merely a trustee for A. The beneficial interest results to the person who provided the purchase money, that is, A. (b) Where there is a voluntary conveyance or transfer into the name of another or into the joint names of the grantor and another. Here, there is a resulting trust to the grantor. (c) Where a person conveys property to trustees upon certain trusts which fail wholly or which do not exhaust the beneficial interest. These are said to fail wholly or partly. The trust leaves some or all of the equitable interest undisposed of. The beneficial interest or part that is undisposed of results back to the transferor. For example: (i) Failure of the whole trust: A settlor may transfer KShs. 1 Million to trustees on trust for his niece Karindeche. Unbeknown to the settler, Karindeche has died, so there is no person to take the intended beneficial interest under the express trust. The trust fails wholly. Consequently, the beneficial interest ‘results’ or springs back to the settlor, and the trustees will hold the property upon trust for the settlor. (ii) Failure in part: If a settlor transfers property to trustees to hold in one-third shares for Tom, Dick and Harry and Tom has died, then that one-third share will be held on a resulting trust for 1
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J.K. ASIEMA GPR 310 LAW OF TRUSTS 2012 the settlor. Also, if there is a gift on trust for A for life and then on trust for X if X attains the age of 21 years, but X dies under 21 in A’s lifetime, the property will result on A’s death to the settlor. In both categories a) and b) above, there is an implied or presumptive trust. In Re Vandervell’s Trusts (No 2) [1974] Ch 269, Megarry J. classifies these two categories as ‘presumed’ resulting trusts because they depend upon the presumed (or implied) intention of the grantor.
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