Knight Trust Case Study

Introduction

Establishing a valid trust, Lord Langdale MR mentioned in Knight v Knight that three certainties were required: certainty of intention, subject matter and objects. Trust is of utmost importance as it imposes a binding obligation on the trustees, which ensure that a trustee can manage a trust properly. In order to advise Hugh on the will that he has previously made, the issue is whether the words used are sufficiently obligatory to impose a trust. Hugh, as a settlor, has the power to appoint benefits during lifetime. Noted that these powers will only vest in the trustees, Kay Oss and Anna Key, after Hugh’s death.

Will Fayle

In the three certainties, we have to first look at the certainty of intention, which considers whether

The requirements are as such, it must be clear what the property is held on trust, and the beneficial interest must be clear. Applying the law in here, giving ‘reasonable amount to my old friend Will Fayle’ will not be sufficient to create a trust as it is hard to defined what is ‘reasonable’. It might be reasonable to the settlor but it won’t be necessarily reasonable to Will. Also, it does not clearly state out giving a reasonable amount of what substance to Will, i.e. It could be a reasonable amount of his savings or a reasonable amount of his property. Hence, with the use of such ambiguous word, it is difficult to identify the subject matter and trust is not found. If there is a lack of certainty on the subject matter of the trust, whether the settlor truly intended to create a trust will be doubted (Mussoorie bank Ltd v Raynor) . Whilst defining the property, if the settlor has not set out the beneficial interests with sufficient clarity, the property will return to his estate on resulting trust (Boyce v Boyce)

Yet, there are few legal requirements to fulfil in order to enable a valid charitable trust, including the trust must have a recognised charitable purpose, the trust is for the public benefit and it must have exclusively charitable purposes. Charitable purposes were set out in the case of Commissioners for Special Purposes of Income Tax v Pemsel , which Lord Macnaghten identified four principles of charity: the relief of poverty, the advancement of education, the advancement of religion and other purposes beneficial to the community. As it is a reputable registered UK charity, it shows that there are recognised charitable purposes. For public benefit, Re Scarisbrick lays out that the general rule: charitable trust must be of benefit to the public or to some section of the public. Hence, Water Aid has to benefit the community in a numerous way and the benefited public group must be large enough in order to establish a valid charitable trust. Last, it has to be proven that there