In this respect notice that when a half secret trust fails there is no question

In this respect notice that when a half secret trust

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In this respect, notice that when a half-secret trust fails, there is no question of the trustee taking the property beneficially. This is because the will identifies him as a trustee so if the trust fails, he will hold the property on trust for the residuary beneficiary under the testator’s will or, if there is no residuary beneficiary, for the testator’s next of kin under the intestacy rules Communication of the half-secret trust must be before or at the time of the execution of the will There are dicta to the above effect in the following House of Lords case which finally established the validity of half-secret trusts. Relating half-secret trusts to fully secret trusts, Viscount Sumner said ‘in both cases, the testator’s wishes are incompletely expressed in his will. Why should equity, over a mere matter of words, give effect to them in one case and frustrate them in the other?’ In other words, half-secret trusts should also be capable of being valid. Blackwell v Blackwell [1929] - In a codicil to his will, the testator, John Blackwell, left a legacy of £12,000 to five trustees ‘to apply for the purposes indicated by me to them’. - Before he executed the codicil, the testator orally communicated to the five trustees that the money should be held for the testator’s mistress and illegitimate son, and one of the five trustees made a memorandum of these instructions. - Subsequently, the residuary beneficiaries (the testator’s widow and legitimate son) argued that the half-secret trust failed on the ground that parole evidence was inadmissible to establish the trust. - The House of Lords held that as the trustees accepted their obligations under the half- secret trust before the execution of the codicil, oral evidence was admissible of the trust. - Principle The half-secret trust was communicated before the codicil was executed and upheld. - Application This case established the validity of half-secret trusts. To summarise, the House of Lords case, Blackwell v Blackwell , contains dicta that a half- secret trust will fail if it is communicated to the trustees after the execution of the will/codicil. We have noted that there were similar dicta in the Court of Appeal case Re Keen . These dicta were followed in the first instance case Re Bateman’s Will Trusts [1970] in which trustees were directed by the testator in his will to pay the income from his estate ‘to such persons . . . as shall be stated by me in a sealed letter . . .’ This half-secret trust failed because the will referred to a future communication.
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Any additions to the property to be held on secret trust must be communicated to the secret trustee. Re Colin Cooper [1939] - The testator left £5,000 to two trustees to hold on a half-secret trust. - He later executed a codicil increasing the amount to £10,000 stating ‘they knowing my wishes regarding that sum’.
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  • Fall '15
  • Law, Wills and trusts, Trust law, secret trusts

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