CILEx L6 Equity and Trusts

Question 1

Which of the following correctly states the three certainties required to create a valid express trust, as established in Knight v Knight (1840)?

Accepted Answer

Certainty of intention, certainty of subject matter, and certainty of objects

Answer

Certainty of form, certainty of consideration, and certainty of purpose

Answer

Certainty of writing, certainty of beneficiaries, and certainty of duration

Answer

Certainty of capacity, certainty of formality, and certainty of registration

Question 2

In relation to secret trusts, what is the key distinction between a fully secret trust and a half-secret trust regarding communication?

Accepted Answer

For a fully secret trust, communication may occur at any time up to the testator's death; for a half-secret trust, communication must occur before or at the time of execution of the will

Answer

A fully secret trust requires communication before the will is executed; a half-secret trust does not

Answer

There is no difference in communication requirements

Answer

Both types require communication to be made in the will itself

Question 3

A trustee uses trust funds to purchase a property in their own name. The property doubles in value. Which equitable remedy is available to the beneficiaries?

Accepted Answer

The beneficiaries may elect to either claim the property itself (through a constructive trust) or trace the trust money into the property and claim its increased value

Answer

The beneficiaries may only claim the original amount misapplied

Answer

The beneficiaries can only claim damages for breach of trust equal to the original sum

Answer

The beneficiaries must accept the property and cannot claim the monetary difference

Question 4

Under the law of resulting trusts, in which circumstance does a presumption of resulting trust arise?

Accepted Answer

When property is purchased in the name of another person and there is no evidence of a gift or loan

Answer

When a trustee acts in breach of their fiduciary duties

Answer

When a beneficiary under a will predeceases the testator

Answer

When a charity ceases to exist

Question 5

What are the fiduciary duties owed by a trustee that prohibit them from making an unauthorised profit from the trust?

Accepted Answer

The self-dealing rule and the fair-dealing rule

Answer

The duty of care and the duty to act impartially

Answer

The duty to invest prudently and the duty to distribute income

Answer

The duty to keep accounts and the duty to provide information

Question 6

In the context of charitable trusts, which of the following is NOT a requirement for a trust to qualify as charitable under the Charities Act 2011?

Accepted Answer

The trust must have identifiable individual beneficiaries

Answer

The trust must fall within one of the descriptions of charitable purposes in s.3

Answer

The trust must be for the public benefit

Answer

The trust must be exclusively charitable