Secret Trust Justification Essay

SECRET TRUST JUSTIFICATION ESSAY
We will discuss secret and half-secret trusts in our answer to the

question as well as the reasoning for them. One possible justification for
such a trust might be found in the Viscount Sumner remark. We'll
examine this logic and determine whether the advantages actually
outweigh the disadvantages and we are also going to examine if the fraud
justification is supported by additional studies or stands on its own in
the second half of our response to the question.
Understanding the structure of these trusts is the first step in dealing

with them and because both the names are almost similar this suggests
that their underlying concepts are identical. When settlers leave gifts to
individuals, they frequently create secret trusts. The person has been
informed that the goal is for them to serve as a trustee on behalf of other
beneficiaries. Anyone looking at the will from the outside cannot see the
trust, therefore the word "secret." When assets are placed in the trustee's
care, a trust is created, but the conditions of the trust are not made plain
in the will as a result both implicit and explicit trust are present. There
have been numerous attempts to justify these trusts, but the thesis of
our answer is based in Viscount Sumner's justification in the case of
Blackwell vs Blackwell. Researchers discovered that in the absence of a
trust, a potential beneficiary could lawfully claim the settlement funds by
taking advantage of the settler's goodwill.
The fundamental tenet of trust law is that no formalities are necessary if

a trust is inter vivos but certain specific procedures must be followed in
accordance with the Wills Act 1837 if the trust was established by a
written document such as a will. Over the course of several decades in a
number of significant decisions, the requirement of complying with
particular formalities in uk law has been up to debate and it is evident
that secret and half-secret trusts do not meet any of these requirements
after studying the nature of these procedures. They are seen as being
equally as legally binding as a trust established during a person's
lifetime. A rule exception must be justified for the courts to acknowledge
its existence.
The "prevention of fraud" idea had been backed by secret and half-secret
trusts as well as the first trust rules. As it grew out of equity law, it took
a lot from the original equity maxims. The most important saying is that
"equity puts substance before form." This means that even if it can't be
proven that the goal has been reached, equity will still think that it has.
The common law was as rigid as a block of concrete, and people worked
to make it less rigid so that everyone could be treated equally. This
means that it is better to follow the settler's wishes than the trustee's
demands.
Equity also supports the trustee's morals, and it has always been set
apart by its awareness. The most important rule of equity is that you
can't use the common law in a way that isn't fair to take advantage of
someone. This also backs up Viscount Sumner's claim that this kind of
behavior would be frowned upon by a court of conscience and that it
would be necessary to set up secret and half-secret trusts to prevent
theft. The key factor shows that there is no real difference between trusts
that are fully secret and those that are only half secret. Lord Sumner
wrote in Blackwell that there isn't much difference between the two
trusts in the real world and the only real difference is in the process of
adoption and not in the end result. When preventing theft is the goal,
there is a strong case for setting up two trusts with too many similarities
to be able to tell them apart. It is possible to disprove the idea that
people who are in secret or half-secret trusts can be found out because
there aren't enough formalities. In reality, things don't work this way.
The three sure things are true for all inter vivos trusts, even ones that
are secret or only partly hidden. In other cases, courts have been more
likely to throw out this type of informal trust because it doesn't give the
trustee enough security to make sure the property is given out properly.
This theory has many good points, but it also has many bad points and
drawbacks. First, the case law talks about things like uncertainty and
reluctance, which have nothing to do with fraud. One of these is the case
of Ottaway vs. Norman. In this case, the owner left some property to the
janitor, Norman, as part of his will. It was said that Norman and the first
tenant had agreed that the land would belong to Ottaway after Norman
died. Documents don't show that Norman left anything out of the will on
purpose to commit fraud or for any other related reason. Despite that,
Ottaway was able to prove that there was a secret trust. This shouldn't
have been okay just because it would help stop fraud. Viscount Sumner's
reasoning has the same problems when it comes to proof. In McCormick
vs. Grogan, the court decided that Grogan hadn't committed equitable
fraud and that his conscience wasn't hurt because the form of the
agreement wasn't clear even though there were signs that an agreement
had been made. The problem is that the courts had to look at each case
carefully instead of setting a clear rule.
The case of Re Keen, where there was a disagreement over when the
trustee had been given the go-ahead to act, brings up further issues with
the admissibility of evidence. The court contrasted this circumstance to
one in which a ship's captain received orders in sealed form but was
nevertheless required to command the ship. It makes sense to question
how a trustee might be held accountable for dishonesty or fraud if they
were unaware of the obligations they were accepting. Keen, though,
believed that the unspoken trust had already been established.
The main problem with the argument is that it is based on trusts that
are only half-secret. Even though Viscount Sumner is worried, there are
clear differences between half secret trusts and fully secret trusts. The
beneficiary who is named as a trustee in the will is not a good choice to
get the money from a half-secret trust. If the trust was ended the assets
would move from the trustee to the estate. Also, the Blackwell defence
isn't enough on its own because it doesn't protect trusts that are only
half secret. Even so, this complaint might get some pushback. Re: Dale
mentioned a study that found fraud can be done by a beneficiary or
settler even if the trustee stands to gain from the plan. This plan has
some good points, but it's also possible that some of it is just made up to
keep people from criticizing rather than to stop them. Most of the
problems with the study come from different approaches, which are more
popular right now than the idea of stopping fraud. Hanbury says that it's
not enough to just say that secret trusts are built on the three bases of
intention and dialogue and consent / persmission.
Although the analysis which has been given by Viscount Sumner has its
own advantages and disadvantages it is still useless in the absence of a
rejection. In reality such a substitute already exists in accordance with
the stare decisis concept. The courts established the rule that trusts
created outside the will, such as a secret trust or half-secret trust, were
enforceable in the case of Cullens versus the Attorney General for
Ireland. The will offers extra written documentation of the parties wishes.
The only trusts that demand formalities are those specified in a will so
there is no concerns about a lack of formalities.
Viscount Sumner pushed his "fraud" theory in the same case, Blackwell
vs. Blackwell where the same idea was first brought up. Lord Warrington
came to a different opinion, which was that the link between the settlor
and the trustee was very important. Since the trustee agreed to the
terms, equity can be used to make them happen. Even though it could
be said that this idea could also be used to stop fraud, the focus here is
on how important the link is, not how likely fraud is.
Re Young made it clear that this idea had been looked into and found to
be true. In this case, the settler's wife was in charge of the trust, and
$2000 was given to the witness to the will. According to section 15 of the
Wills Act any witnesses to a will have no right to profit. What this means
is that if the trust had been set up by the will it would have been void
and would not be possible to be enforced. The court ruled that the trust
was not related to the will due to its ambiguous objectives.
To conclude we can say that it is obvious that there is disagreement over
the "prevention of fraud" argument after weighing the advantages and
disadvantages. However, the conclusion is that this is not a sufficient
explanation, particularly when taking into account half-secret trusts.
Therefore, it is reasonable to claim that these trusts serve a dual purpose
by defending beneficiaries from fraud and ensuring that the trustee is
held responsible for their duties.
“IT IS IMPORTANT TO NOTE THAT QUESTIONS COULD COME

FROM A VARIETY OF ANGLES IN THE EXAM SO THESE ESSAYS
DO NOT GURRANTEE YOUR MARKS. IN ORDER TO ANSWER THE
QUESTIONS IN THE PAPER AND RESPOND TO NEW ANGLES,
PLEASE STUDY THE ENTIRE CHAPTER AND UNDERTAKE
PREPARATORY RESEARCH.”

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SECRET TRUST JUSTIFICATION ESSAY

We will discuss secret and half-secret trusts in our answer to the

Understanding the structure of these trusts is the first step in dealing

The fundamental tenet of trust law is that no formalities are necessary if

“IT IS IMPORTANT TO NOTE THAT QUESTIONS COULD COME

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