This chapter examines when a trust becomes fully constituted. It considers the maxim of equity 'equity will not assist a volunteer'. A trust is fully constituted when the settlor either conveys the property to a trustee or declares that he holds the property on trust for named beneficiaries. The trust will only be enforceable when a settlor has done everything in his power to transfer the property according to the nature of the property. In some limited circumstances a trust will be enforceable even where the settlor has not done everything in his power if it would be unconscionable not to enforce it. An incompletely constituted trust may be enforceable by the benficiaries either under teh rules of contract or unusually as a trust of a promise. There are three main exceptions to the rule that equity will not assist a volunteer: the rule in Strong v Bird; a donatio mortis cause and proprietary estoppel.

This chapter examines the problems created by unincorporated associations which do not have legal personality. Where people join togther to form a group to pursue a common purpose such as sport then unless they wish to register as a company the law will not recognise the group. Problems arise where the group wish to hold money or funds. Unincorporated associations are defined as where two or more persons are bound togther for a common purpose. The group is bound by mutual undertakings each having mutual duties and obligations and a member can join or leave at will. There are a number of theories as to how an unincorporated association can hold funds such as a gift to present membersalthough this is a problem if the property is not easily divisible. Another theory is a trust for the present members and also a trust for present and future members. The most popular theory is the 'contract-holding theory'. Under this theory where a member signs up to join a group it is held that funds are held by an officialaccording to the rules by the club. A sole surviving member of a club can claim the funds for himself absolutely.

This chapter examines the nature of fiduciary duties. They are difficult to define but include loyalty, acting in good faith and ensuring that there is no conflict of interest. This relationship arises where one person has undertaken to act for another. E.g. trustee and beneficiary, solicitor and client, and company director and board. Such relationships also arise where it develops from the nature of the duties owed such as the employer and employee relationship. Not all duties owed by a fiduciary are fiduciary in nature such as the duty of care owed by a solicitor to his client. The emphasis in this area of law is on the fact that a fiduciary cannot make a profit from his position and any profit will be owed to his principal e.g. a trustee must disgorge any profits made through his position as a director if the directorship is attributable to his trusteeship. The law does not differentiate between profits made in good faith and those made in bad faith. Much of the chapter concentrates on the question of bribes and opportunities that arise through the position of a fiduciary. The law is now settled that the principal can claim a proprietary remedy rather than a personal remedy which is relevant where a fiduciary is bankrupt as the principal will have the first claim to any funds held by the fiduciary.

This chapter examines the resulting trust. It is a type of implied trust and it arises by operation of laweither because of the presumed intention of the parties or because of the failure of an express trust. A presumed resulting trust arises where land is purchased in the name of one party but the purchase monies have been provided by another party. The presumption can be rebutted by evidence of a gift or advancement to a close family member of a loan. Evidence of an illegal motive was once inadmissible to use to rebut a presumption but today the court uses its discretion as to whether it will be admitted. Automatic resulting trusts usually arise where a purpose has failed. A new type of trust 'the Quistclose trust' was created when Quistclose successfully recovered money loaned to pay dividends to a company which went bankrupt. Sometimes a surplus remains after the purpose of the trust has been carried out this will result back to the settlor and where a trust fails to conform with key requirements of a trust then the property will usuallyrevert back to the settlor although in some cases the trust property has been found to be an absolute gift.

This chapter considers ownership of the family home which is often the most significant asset owned by the parties. Where a couple are not married or in a civil partnership ownership has to be determined through principles of land law and trusts. There are two approaches eithera resulting trust or a constructive trust and both are considered in detail although the resulting trust is used far less frequently today in relation to the family home. The resulting trust is based on contributions to the purchase price whereas the constructive trust is based on intention of the parties which can either be implied or express. Where property is owned jointly the court presumes equal ownership of the beneficial interest but this can be rebutted. There is far more flexibility with a constructive trust both in finding intention and also in quantification of the shares but the outcome of cases is far more uncertain particularly where the courts impute the intentions of the parties as to the size of the shares. Rights in the family home can also arise under proprietary estoppel.

This chapter describes the wide variety of duties that the office of trustee carries. At the heart of trusteeship is the duty to carry out the terms of the trust and to act in the best interests of the beneficiaries at all times. The trustees owe the beneficiaries a duty of care both under common law and statute. Trustees owe a range of duties such as to provide accounts and information and to act unanimously and impartially at all times. The common law governs the right of the beneficiaries to see trust documents in particular the case of Schmidt which held that the court can exercise its discretion as to who can see a trust document. Trustees have a duty to exercise any discretion personally. Trustees do not have to give their reasons for any decision made but where they do so the court has the right to examine the reasons. Trustees have a statutory duty to invest the trust fund and a duty to apply the standard investment criteria which includes the need to consider whether the investments are both suitable and also sufficiently diverse. A trustee has a duty to act personally but may delegate some duties. The Trustee Act 1925 gives the trustees powers to advance both income and capital to beneficiaries.

One of the key rules of trusts is that there must be ascertainable beneficiaries so a trust for a purpose may fail because the objects are uncertain. There are some limited exceptions which allow purpose trusts to be upheld. These are examined in this chapter. The first group are the anomalous exceptions which include trusts for specific animals. Trusts for animals as a group will be charitable but only if they fulfil the public benefit rule. A trust to erect and maintain a monument has usually been upheld but only where it complies with the perpetuity period. Following the case of re Denley where a trust appears to be for a purpose it may be upheld if there are hidden beneficiaries. In some circumstances an unincorporated association can form an exception to the beneficiary principle. There is a possible solution to the problems created by purpose trusts which is to use an enforcer or protector trust. The chapter discusses how these have been adopted in countries such as the Bahamas and the Channel Islands. It also considers the problem of who enforces against the enforcer of a purpose trust since the enforcer has no interest in the trust property.

As a general rule once a trust is fully constituted the terms are binding on the trustees and the provisions of the trust must be carried out. Occasinally where circumstances have changed there is scope to vary the trust usually in the event of an unforeseen event arising. This chapter examines when the terms of a trust can be varied. The court holds inherent jurisdiction to vary the trust in certain circumstances but the jurisdiction is limited. There are several statutory provisions that give the court jurisdiction to vary a trust but the statute with the widest range of powers is the Variation of Trusts Act 1958. Under the Act the court can authorise a variation on behalf of a range of beneficiaries including any person with an interest both vested and contingent and who by reason of infancy or incapacity is incapable of assenting. It also includes a category of beneficairies who may become entitled if certain events occur in the future. Exercise of the jurisdiction depends on whether it is for the benefit of the beneficiaries and this is dependent on whether a benefit can be shown both financial and non-financial. The jurisidiction is very wide but cannot be exercised if the court believes there is a resettlement as opposed to a variation.

This chapter examines the differences between a trust and a power and explains that a trust imposes an imperative obligation on the trustee which leaves the trustee with no choice but to act. By contrast a power is discretionary and a donee of a power of appointment does not have to act. A power is generally used where a donor wishes the donee to make a decision but does not wish to impose the duties of trusteeship. The chapter also examines the different types of trusts public, private, express, implied, bare, fixed and discretionary. It contrasts the different types of powers in particular bare powers and fiduciary powers. Finally the chapter contrasts trusts with other legal concepts such as gifts, debts, bailment, agents and interests under a will or intestacy and also examines the modern use of the trust. These include pension schemes, investment schemes and purpose trusts. Other examples of the uses of a trust include unincorporated associations, protective trusts and charitable trusts. Most of these separate uses are dealt with in more detail later in the book.

This chapter considers constructive trusts which are the second type of implied trusts. They arise by operation of law and are imposed in a variety of situations. The chapter considers the difficulties in defining a constructive trust. Some writers consider that they fill a gap in the law and definition is unnecessary. There is a further debate aboutthe use of constructive trusts in England and Wales which is to respond to a number of well-defined situations [an institutional constructive trust] as opposed to other jurisdictions which use constructive trusts as a remedy to reverse unjust enrichment. Constructive trusts have been imposed as a way of enforcing contracts for the sale of land and enforcing rights in the family home. They are also used to address unauthorised gains by a fiduciary which has been a controversial use for many years aswell as an explanation of rights arising under secret trusts and mutual wills. The debate as to why England and Wales does not use the remedial constructive trust is explored in some detail and concludes that in spite of increasingly sympathetic leanings towards the remedial constructive trust it has yet to be adopted in courts in England and Wales.

This chapter examines the appointment, retirement and capacity of trustees. They are initially appointed under the trust instrument by the settlor but provision must be made for their replacement. The settlor can reserve the power to appoint new trustees in the trust instrument, alternatively a named person may have the power. There is a statutory power to appoint where no provision has been made by the settlor and the appointment may be made by the surviving or continuing trustees. On rare occasions appointment can be made by the court or by the beneficiaries. Anyone with legal capacity can be appointed as a trustee although a minor cannot be a trustee of land. Professional trustees are sometimes appointed. There is no limit on the number of trustees for a trust of personalty but for trusts of land the limit is four. The Trustee Act 1925 provides for when a trustee can retire or be removed. Trustees are not usually paid but in some circumstances payment is made subject to provisions in the common law or the Trustee Act 2000. This act widened the circumstances when remuneration will be made to the trustees.

This chapter examines the nature of trusteeship and the possible actions for breach that can be brought by the beneficiaries. Breach can arise by commission [actively commiting a breach of trust]or by omission [failing to carry out a duty owed by the trustee]. The duties of a trustee arise either under common law or under statute or under the trust instrument. A trustee is liable for any breach of trust that causes a loss to the beneficiaries and must restore the equivalent value. The trustee will only be liable for a breach that caused the loss to the fund and the claimant must establish a causal link. The liability of trustees is joint but the beneficiaries can choose to only sue one trustee but in some cases the court may indemnify a trustee such as where one trustee has acted fraudulently. The beneficiaries may be able to claim interest as well as compensation from the fund. Trustees may be able to rely on an exemption clause which will exonerate them from liability. If there is no exemption clause trustees may be able to rely on other defences such as consent of the beneficiaries or the statutory defence under s.62 Trustee Act 1925.

This chapter traces the historical background to equity as a separate system. It examines the defects of the common law. In particular the failure to recognise certain rights such as those of the mortgagor or of a beneficiary under a trust. It explains that equity is a 'gloss' on the common law and is not a complete system of rules. It traces the role of the Lord Chancellor in the development of equity. It describes how equity also became unpopular and inflexible and litigants often had to take two actions one in the courts of equity and one in the courts of common law. Eventually the two systems were fused under the Judicature Acts of 1873-1875. Many question whether there was complete fusion as equity continues to exist as a separate system relying on discretion. Equity relies on a number of maxims which serve as guidance to the courts but are not enforceable as binding principles of law.

This chapter examines the circumstances when a stranger to a trust becomes liable as if he is a trustee because he has become involved in some way with a trust. The stranger will be liable to compensate the trust fund for any losses suffered. This is relevant where the trustees canot be found or where a trustee is bankrupt and therefore has no funds with which to compensate the trust fund. There are three instances where a stranger will become liable as if he were trustee: either acting as a trustee de so tort, or knowingly receiving trust property or knowingly assisting in a breach of trust. The test for liability where a third party receives trust property has varied over the years . The test today is based on unconscionability. The test for dishonest assistance is based on an objective test for dishonesty. This is more in line with the criminal test of dishonesty and replaces a combined test which involves a subjective element on behalf of the wrongdoer. Where a third party holds himself as if he were a trustee but intermeddles with the trust property then he may be liable.