But such an epistemology is also open to criticisms. For example, itsuggests that rational trust will always be partial rather thancomplete, given that the rational trustor is open to evidence thatcontradicts his or her trust on this theory, while someone who trustscompletely in someone else lacks such openness. The theory alsoimplies that the reasons for trusting well (i.e. in a justified way)are accessible to the trustor, at some point or another, which may befalse. Some reasons for trust may be too “cunning” for this to be the case. Here, I have in mind a reason for trusting others that Philip Pettit discusses (1995): trust signals to people that they are being held in esteem, which is something that they will want to maintain; they will honor our trust because they are naturally “esteem-seeking.” However, consciously having this reason for trust is incompatible with actually trusting (Wanderer and Townsend 2013, 9), that is, if trust involves being optimistic that people will act out of motive other than self-interest.
Note: This is a typical problem on the three certainties, with concentration on certainty of objects. When considering certainty of objects, it is important to appreciate that the three versions of the Baden test may cause different results for the validity of the trust or power. All must be considered and Baden should not be regarded as having a clear ratio decidendi.
The trust is a unique creation of the common law, and one of its most versatile concepts. Moreover, when the trustee holds property on trust for the bene?ciary, the trustee is submitting to one of the most powerful forms of legal obligation known to English law. A trustee may well ?nd himself bound by onerous duties, either imposed by the trust instrument, by statute, or by general principles of equity, and there are serious consequences awaiting any trustee who neglects his duties or breaches the terms of the trust. Likewise, the trustee is only the mere 'paper' owner of the property and, unless he is also a bene?ciary, will derive no bene?t from the trust property. The trustee holds the trust property 'on trust' for the bene?ciary for the bene?ciary's use and bene?t, and the trustee may even be prohibited from being paid for his labours (although this will be rare for professional trustees: see ss 28-30 of the Trustee Act 2000). Necessarily, therefore, there must be clarity and certainty when establishing a trust. It is vital to be clear that the person to whom title to the property is transferred (or who already possesses it) is indeed bound by a trust and so may not use the property for himself. Similarly, the rights of the bene?ciaries must be established with certainty so that they may be allowed to enforce the trust should the trustee fail to carry out its terms. In other words, the need to determine where the real ownership of property lies and the need to be certain about the nature of the ownership of the trustee and bene?ciary requires trusts to be created and evidenced with some measure of formality. Of course, that is not to say that all trusts must ful?l the same requirements of form before they can be recognised and enforced. After all,
it is common in English law for there to be different levels of formality when dealing with different types of property. For example, transactions concerning land - an immovable asset - have traditionally required a higher degree of formality than dealings with other kinds of property. Thus, it should come as no surprise to learn that the nature of the property which is to be the subject matter of the trust is relevant when considering how trusts may be validly created.
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A definition essay is one of the easiest kinds of writing assignments that you might be given. To write a good definition essay, you should be able to explain the meaning of a word, phrase, or concept. It is similar to what you do when tell your friend about a concept that you have studied in class recently. However, it is harder to do the same in writing, therefore you should select a topic keeping in mind that you will have to write about a chosen term or concept. Generally, it is easier to write about real word concepts compared to abstract ones.
In considering the creation of trusts, it is important to realise that there are two distinct and separate issues which must be addressed. First, it is inherent in the concept of a trust that the trustee be invested with title to the trust property, either because he is already the owner of that property or because such title has been effectively conveyed to him by the settlor. Unless that is the case, the trust is said to be incompletely constituted and the bene?ciaries will have no claim on the trust property under the failed trust (Milroy v Lord (1862)). A recent innovation created by the Privy Council involves the occasion where the settlor appoints multiple owners as trustees, including himself. If he manifests an irrevocable intention to create a trust, his retention of the property will be construed as one of the trustees thereby constituting the trust, whether with or without a transfer to the other trustees. The maxim, 'equity regards as done that which ought to be done' will be applicable, see Choithram v Pagarani (2001). In cases where the trust property needs to be conveyed to a trustee, it is necessary to examine the particular type of trust property in order to determine what must be done in order effectively to transfer the title. The require�ments will be different for each type of property. Secondly, there are 'external' formality rules, imposed by statute, which regulate the way in which trusts per se can be created. These are to be found in the Law of Property Act (LPA) 1925 and they are designed to ensure that the creation of trusts of certain kinds of property is not open to doubt and to minimise the potential for fraud by the trustee. Failure to ful?l these requirements renders the trust unenforceable, even if title to the property is effectively vested in the trustee (s 53 of the LPA 1925).
The ?rst issue is the creation of a trust by establishing that the trustee has title to the property. Once again, a distinction needs to be drawn at the outset between situations where the existing owner of the trust property declares himself to be a trustee (self-declarations) and situations where the existing owner of property wishes to transfer the property to someone else as trustee (transfer and declaration). In the former case, the person who is to be the trustee already has title and, therefore, there is no need to transfer the property. Consequently, there is no need for any formality for this aspect of trust creation. All that is needed for an effective declaration of trust - or rather, a declaration by the current owner of himself as trustee - is some clear evidence of a present and irrevocable declaration of trust, as in Paul v Constance (1977), and this evidence may take any form. Indeed, there is no requirement that the declaration of trust ever be communicated to the intended bene?ciary (Middleton v Pollock (1876)). So, for example, if A, the owner of a book, declares that 'I now hold this book on trust for B', a trust will be created even if B is unaware of the fact, provided that there are no external formality requirements imposed by statute for the creation of trusts of books (which there are not). It is important to note, however, that for a declaration of trust by the present owner of the property to be effective, the circumstances of the case must not reveal a failed attempt by that owner to create a trust by the transfer of the trust property to another as trustee. In other words, declaration of oneself as trustee requires no formality, because the declarer already owns the property; but such a declaration will not be validly made if the owner had tried and failed to create a trust by the other method - transfer of property to a trustee - especially if that failure is due to a defect in the formality requirements for the transfer of that property (Milroy v Lord (1862)). The intention to declare oneself a trustee is very different from the intention to transfer property to another as trustee and they are mutually exclusive.
Likewise, it is unclear what, if any, sort of motive atrustworthy person must have. Clear conditions for trustworthinessare that the trustworthy person is competent and committed to do whats/he is trusted to do. But this person may also have to be committed ina certain way or for a certain reason (e.g. s/he cares about thetrustor). This section explains these various conditions for trust andtrustworthiness, and focuses in particular on the controversy thatsurrounds the condition about motive.
The second way in which trusts may be created is the effective transfer of property to the trustee. As noted at the outset, unless the trustee has title to the property, the trust is incompletely constituted and the bene?ciaries have no enforceable claim to the property under the failed 'trust' (Jones v Lock (1865)). Thus, if the owner of property decides to create a trust by transferring that property to someone else as trustee, it is essential that the intended trustee obtains title to the property in the manner appropriate to the type of intended trust property. So, if S (the owner and 'settlor') decides to create a trust of his book by transferring the book to A on trust for B, legal title to the book must be effectively transferred to A if the trust is to be constituted and B is to have enforceable rights to it. In reality, then, it is essential to know how title to different types of property may be transferred. Indeed, there is nothing special about the rules we are about to consider, as they are the normal rules applicable to the transfer of title to property whenever and whyever it is conveyed. It is just that, with trusts, the trustee is receiving the property on behalf of someone else and not for his own use. Typical examples of the formality requirements for the transfer of title in property to a trustee are: a deed or registered disposition for land (unregistered and registered respectively); execution of a share transfer form and registration as owner for stocks and shares; written assignment for choses in action; and delivery of possession or a deed of gift for personal property. It is clear, then, that the particular requirements for the effective transfer of title to a trustee depend upon the nature of the property being transferred and, in this sense, the formality requirements for the creation of a trust are really the formality requirements for the effective transfer of ownership of property generally.
One important criterion for trust is that the trustor can accept somelevel of risk or vulnerability (Becker 1996). Minimally, what thisperson risks, or is vulnerable to, is the failure by the trustee to dowhat s/he depends on that person to do. The truster might try to reducethis risk by monitoring or imposing certain constraints on the behaviorof the trustee; yet after a certain threshold perhaps, the moremonitoring and constraining s/he does, the less s/he truststhat person. Trust is relevant “before one can monitor theactions of … others” (Dasgupta 1988, 51) or when out ofrespect for others one refuses to monitor them. One must be content with them having some discretionary power or freedom (Baier 1986; Dasgupta 1988). Hence, one cannot reject being vulnerable.
Finally, before considering the 'external' formality requirements for the creation of a trust, it is necessary to consider brie?y one or two exceptions to the general principle just considered. First, a trust may be held to have been validly constituted, despite the fact that the trustee has not formally received title, if failure to be invested with that title is because of non-compliance with some condition outside the control of the settlor or trustee. Thus, in Re Rose (1952), a trust of shares in a private company was held to be perfectly constituted despite the fact that the legal title of the trustee had not been formally con?rmed at the relevant time by entry in the share register of the company. This was because transfer of legal title was by registration in the company's register but its directors had a discretion to refuse such registration and registration had not yet taken place. Given, then, that complete transfer of legal title was outside the settlor's (and trustee's) control, lack of compli�ance was not destructive of the trust. Similarly, in Mascall v Mascall (1985) title to registered land was taken to have been effectively transferred by completion of the relevant land transfer form even though registration of that title by the registrar had not yet occurred. Likewise, in Pennington v Waine (2002), the Court of Appeal decided that the execution and delivery of share transfer forms to an intermediary for the purpose of registering the new owner was suf?cient to transfer the equitable interest. However, it is unclear whether legal title will be taken to have been effectively transferred if subsequent registration (of the private company's shares or registered land) does not take place and so the exception really allows the trust to be constituted in advance of the time that it technically occurs. Secondly, according to Re Ralli (1964), it may be immaterial that the trustee acquires title to the trust property in a manner different from that which the settlor originally intended. So, even though the settlor has failed to transfer title to the trustee during his lifetime, if the intended trustee is also the settlor's executor under his will, when the settlor dies, the executor (and trustee) will obtain legal title by virtue of his position as executor and the trust will thereby be constituted, albeit in a different manner from that which was intended. Thirdly, there are several other methods by which title to property may be effectively transferred from one person to another without the normal formality rules for that type of property being satis?ed. However, these are usually relevant when the transferee obtains the property absolutely and not as trustee - that is, they are used to make gifts, not to perfect trusts. Examples include the principles of donatio mortis causa and the law of proprietary estoppel.