Secret Trust Essay

1700 Words4 Pages

What is the best rationale or explanation for the recognition and enforcement of secret trusts? Discuss.
The doctrine of secret trusts (STs) have long been upheld by the courts, however, the basis for doing so is unclear and has been a strong area of contention by academics. The two principal suggestions are that they arise to prevent fraud on the part of the trustee – ‘the Fraud Theory’ and that they arise/operate outside the Will so as not to invoke the testamentary formality rules under the Wills Act 1837 (WA) – ‘the Dehors the Will Theory’. Firstly, this essay through the analysis of leading cases and academic arguments, will show well founded reasoning for the doctrine of ST. Then, it will assess which theory is the best explanation for …show more content…

According to s. 9 Wills Act 1837 –, “No Will shall be valid unless it is in writing, signed by the testator and attested by two witnesses.”
Nevertheless, ST is the exception to the formalities of the testamentary disposition as it does not apply the formality requirement of the Wills Act. Richard Spearman QC in Freud defined STs as “providing or the testator a means of creating a trust without publicly identifying the beneficiary and/or the terms if the trust.”
There are two types of ST one is fully secret trust (FST) and another is half secret trust (HST). In FST on the face of the Will, it appears to be an absolute gift, whereas for HST, the Will makes clear the existence of the trusts, consequently, as in Ottaway v Norman, the ‘beneficiary’ is not an absolute beneficiary, but actually holds the property on some kind of trust for another unknown beneficiary.
Enforcement of STs
Wills Act does not enforce ST, however, equitable jurisdiction recognises ST. The whole basis of an ST as I understand it from Re Snowden, is that they operate outside the Will, changing nothing written in it and allowing it to operate according to its tenor but then fastening a trust to the

Open Document