This video is about Classification of Trusts. Both express (fixed & discretionary) and non-express/implied/imputed (resulting and constructive) trusts are explored. Particular detail to remedial & institutional constructive trusts and automatic & presumed resulting trusts are made. Please find some written notes below.
Express trusts – These are trusts intentionally created by settlor either expressly declaring himself trustee or transferring to a third party trustees, the trust.
Fixed express trust – This is where the beneficiary has a fixed entitlement to the the asset
Discretionary express trust – This is where the beneficiaries’ entitlements are not set out by the settlor in the trust deed and are left to the discretion of the beneficiaries.
Non-express/implied/imputed trusts – It is where a trust is inferred by operation of law as opposed to the settlor expressly declaring a trust.
Constructive trusts – A trust created by the courts where it is unconscionable for the legal owner to retain equitable ownership e.g. where a trust property is transferred to a third party with the knowledge of the beneficial ownership. Satisfy the demands of justice and good conscious.
Remedial v Institutional constructive trusts
The US remedial model focuses on the trust structure to resolve injustices whereas the traditional English model has been to enforce the structure so long as the legal conditional are met regardless of any dispute. Remedial trusts lie in the discretion of the court whereas institutional constructive trusts operate in the rule of law.
Resulting trust – Operation of law as opposed to any good conscious mechanism. According to Lord Browne-Wilkinson in Westdeutsche Landesbank v Islington LBC 1996: They arise in two situations:
Automatic – where there has been an attempt to create a trust but the beneficial interest fails e.g. it hasn’t been fully dealt with.
Presumed – where voluntary gifts and contributions to the purchase price are made, it is assumed that it results back to the donor or those who contributed to the purchase price.