equitable rights to others or terminate the trust only if they are “
Sui
Juris
” i.e. all the beneficiaries are entitled to trust property and they
are major and of sound mind. In
“Saunders v. Vautier”
, V was to
get the capital and accumulated income of the trust at the age of
25. However, he claimed it at the age of 21. It was held that since
he was the sole beneficiary, he had the right to terminate the trust
and get the property.
e.)
Trust Property –
It has to be tangible and capable of being
transferred e.g. land, chattels etc.
f.)
Inter vivos or Will –
Inter vivos trusts are created during the life of
the author by a non testamentary document or even verbally. And
by Will means that a trust was created after the death of the author
by the written, attested and witnessed testamentary documents i.e.
will or codicil.
IV.)
Reasons for Forming a Trust:
a.)
Tax Avoidance –
Trust property ceases to be owned by the Settlor,
thus, avoiding taxes that otherwise would have been payable.
b.)
Secrecy –
A Trust need not be registered. Thus, avoiding unwanted
publicity, for instance, in raising of illegitimate children.
c.)
Protection against
spendthrifts –
Trustees can protect family
fortunes being frittered away by spendthrift beneficiaries.
d.)
Protection against economic instability –
By using an offshore
trust, worldwide investments can be made free from the economic
restrictions imposed by any particular country.
e.)
Long Term Planning –
It allows distribution of wealth even after
death in precisely the same manner as wished.
f.)
Holding property –
A minor may not be able to hold property in his
own name but a Trustee can often hold it for his benefit.
g.)
Promoting causes and charities –
A trust can provide the legal
framework and administrative organisation to achieve charities.
h.)
Management planning –
Companies can provide pension schemes
and benefit plans with their employees as class of beneficiaries.
i.)
Organising collective investments –
A Trust can serve the basis
of agreement between several people wishing to make joint
investments.
Introduction To Trusts
5
j.)
Protection of assets –
Assets can be placed into trust to
safeguard the interests of a beneficiary, such as the inheritance of a
daughter being sheltered from claims if she divorces her spouse.
k.)
Clubs/Unincorporated Association
.
.
