OTHER TYPES OF TRUST

There are numerous instances where equity will compel one party to hold property on trust for another even though a trust has not been formally declared. à May be a resulting or constructive trust, both recognized by statutes of the Law of Property Act 1925..

RESULTING TRUST

The beneficial interest returns to the settlor or testator. This trust is traditionally imposed on the basis of presumption that A did not intend B to be given the beneficial interest.

The court must try to determine objectively what the S intended to do, who was the B???

2 types:

• PRESUMED RESULTING TRUST
  •  No express trust formally declared by the settlor and the recipient has failed to prove that it was an outright gift.
  • Possible to rebut the presumption of resulting trust, but onus on B. Otherwise, the beneficial ownership results back to S unless "Presumption of advancement" applies
  • A will be deemed to have intended an outright gift to B (Husband to wife or to legitimate child), unless there is evidence to the contrary.
• AUTOMATIC RESULTING TRUST
  • Express trust has failed because B was not defined properly or conditions not fulfilled. Equity automatically requires to hold the outstanding equitable interest on a resulting trust for S.

CONSTRUCTIVE TRUST

• Residual category of trust
  • It is when no other suitable category exists.
  • Kind of trust imposed by the courts in a wide variety of situations when it have found it necessary to compel a person to hold property for the benefit of another on the interests of justice and good conscience.
  • It is seen as remedy the judge provides to the part in certain situations, such as:
  • Case of misappropriation of the trust property
  • Breach of trust
  • Fraud

Debates ->some judge consider it as not intellectually justifiable.

FIDUCIARY DUTIES

The trustee's basic functions are to perform duties and exercise the powers provided for in the trust as well as general duties prescribed by statute or by the courts.

Duties are obligatory

Powers are discretionary (power to appoint specified property to certain beneficiaries...)

Duty of care: statutory based under the Trustee Act 2000. Under s1 a trustee must exercise reasonable care and skill. But the standard of care depends on the skills and position of the trustee:

An unpaid trustee: "Take all the reasonable precautions which an ordinary prudent man of business would take in managing similar affairs on his own."

A paid trustee: subject to a higher standard of diligence and knowledge. Special duty to display expertise.

Fiduciary duties are duties imposed by equity to ensure that a trustee's interests do not conflict with those of the trust:

• Unauthorized profits
• Keep the property safe
• Frauds