SQE1 Equity & Trusts

Question 1

Which three certainties must be satisfied to create a valid express trust, as established in Knight v Knight (1840)?

Accepted Answer

Certainty of intention, subject matter, and objects

Answer

Lord Langdale in Knight v Knight established that a valid express trust requires certainty of intention (to create a trust), certainty of subject matter (the trust property), and certainty of objects (the beneficiaries).

Question 2

In determining certainty of intention, which statement best reflects the current legal position after Re Adams and the Kensington Vestry?

Accepted Answer

Courts examine the substance of the language to determine whether a mandatory obligation was intended

Answer

After Re Adams and the Kensington Vestry, precatory words are generally insufficient; courts look at the overall substance of the language to determine whether a mandatory, binding obligation was imposed on the recipient.

Question 3

In Re Golay's Will Trusts, why was a direction to pay a beneficiary 'a reasonable income' held to satisfy certainty of subject matter?

Accepted Answer

A court could objectively assess what constituted a reasonable income

Answer

In Re Golay, the court held that 'reasonable income' was sufficiently certain because it provided an objective yardstick by which the court could determine the appropriate amount.

Question 4

What is the consequence where a trust fails for conceptual uncertainty in its objects?

Accepted Answer

The trust is void

Answer

If the class of beneficiaries cannot be defined with conceptual certainty, the trust is void because no court can determine who qualifies or administer the trust.

Question 5

For discretionary trusts, which test for certainty of objects was adopted by the House of Lords in McPhail v Doulton [1971]?

Accepted Answer

The is or is not test

Answer

In McPhail v Doulton the House of Lords applied the 'is or is not' test: a discretionary trust is valid if it can be said with certainty of any given person whether they are or are not within the class.

SQE1 Practice Test

SQE1 Practice Test

SQE1 Equity & Trusts