chapter  5
18 Pages

SECRET TRUSTS AND

MUTUAL WILLS

Secret trusts are normally employed where a testator wishes to provide for a secret beneficiary, such as a mistress or an illegitimate child, but does not want to name such person as a beneficiary under his will, since a will once admitted to probate becomes a public document, and there would be no secrecy. The testator may therefore during his lifetime arrange with T, a trusted relative or friend, that he will leave property to T in his will, but that the property is to be held upon trust for the secret beneficiary, whose identity will be disclosed to T. If T agrees to the testator's proposal, then a secret trust will arise, and will be enforceable against T after the testator's death. So long as there is sufficient evidence of the secret trust, equity will not allow T to claim the property beneficially but will compel him to hold it on trust. Viscount Sumner explained the doctrine thus:1

A court of conscience finds a man in the position of an absolute legal owner of a sum of money, which has been bequeathed to him under a valid will, and it declares that, on proof of certain facts relating to the motives and actions of the testator, it will not allow the legal owner to exercise his legal right to do what he will with his own. This seems to be a perfectly normal exercise of general equitable jurisdiction. The facts commonly but not necessarily involve some immoral and selfish conduct on the part of the legal owner. The necessary elements, on which the question turns, are intention, communication, and acquiescence. The testator intends his absolute gift to be employed as he and not as the donee desires; he tells the proposed donee of this intention and, either by express promise or by a tacit promise, which is signified by acquiescence, the proposed donee encourages him to bequeath the money in the faith that his intentions will be carried out.