ABSTRACT
OVERVIEW A secret trust arises when a testator wishes to benefi t some person who cannot be named in the will; therefore the testator will ask a trusted confi dant to agree to an arrangement whereby the confi dant will receive a gift under the will ostensibly for her own benefi t but which is in fact to be held on trust by that person for a third person who cannot be named in the will. Equity will enforce this arrangement as a secret trust so that the confi dant cannot claim to be benefi cially entitled to the property left in the will. The secret trust operates in spite of the provisions of the Wills Act 1837 and therefore illustrates equity’s determination to prevent statute being used as an engine of fraud. 1
Secret trusts fall into two main categories: fully secret trusts and half-secret trusts. Fully secret trusts arise in circumstances where neither the existence nor the terms of the trust are disclosed in the terms of the will. Oral evidence of the agreement between the testator and trustee is generally satisfactory. The settlor must have intended to create such a trust. That intention must have been communicated to the intended trustee. The trustee must have accepted the offi ce and the terms of the trust explicitly or impliedly. 2
For a valid half-secret trust, the settlor must intend to create such a trust. Further, the existence and terms of the trust must be communicated to the intended trustee before the execution of the will. The intended trustee must then accept the offi ce of trustee and acquiesce to the terms of the trust. 3
6.1 INTRODUCTION The area of secret trusts raises interesting questions about the operation of equity in the law of trusts to achieve justice between the parties to litigation outside the strictures of legislation and common law. 4 In parallel with that, secret trusts raise a number of questions about the interaction between express trusts and the trusts implied by law which are considered in Part 4 of this book.
