Trusts and equity Essay Example | Topics and Well Written Essays - 1500 words

Trusts and equity - Essay Example The first of these is the certainty of intention to create a trust. The second relates to the certainty of the subject matter. This requires a clear description of the property involved and the related beneficial interests. The last relates to certainty of objects or specification of the beneficiaries of the trust. Charitable trusts are not required to satisfy this last requirement.2 With regard to discretionary trusts, individuals who can benefit from a discretion, are initially beneficiaries as they are the possible objects of a power of appointment. However, it should be possible for the trustee to establish unambiguously, as to who is encompassed by such power of appointment. This requires certainty of criterion. In other words, the court should be able to determine with certainty whether any specific person is within the range of benefits.3 The fundamental consequence of having a trust is that it imposes a binding obligation on the trustees. In Lambe v Eames, the court held that a trust was not created, merely due to the presence of precatory words.4 In Adams v Kensington Vestry, a husband made a gift to his wife that was for her absolute use.5 The court held that a trust was not created by a testator who gave his entire property to his wife, with the understanding that she would do whatever was necessary regarding the disposal of the property. This was to be done between the children either during her lifetime or upon her demise by means of a will.6 Moreover, the court opined that the entire will had to be interpreted, although confidence could create a trust. As such, the trust relationship has to be expressed in sufficiently certain terms, so as to enable the trustee to carry out his duties. Moreover, trustees should be aware of their obligations under the trust. Strictly speaking, the settlor cannot impose a duty upon a trustee that is legally unenforceable due to its ambiguity.7 Trustees are provided with a measure of protection