ABSTRACT
As well as the three certainties the trust must also be fully constituted. The property must be transferred either as an outright gift or, if on trust, into the names of the trustees. If not, there is no valid trust. Proper constitution depends on the necessary formalities being properly implemented for transferring the property.
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Cases: |
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Milroy v Lord (1862) |
Shares were covenanted to be transferred by the donor to the donee; however, the donor died before the transaction took effect. Held There was no valid gift as the proper formalities had not been followed. Turner LJ: ‘[T]he settler must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property…. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes.’ |
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Jones v Lock (1865) |
A man returning from a business trip was scolded by his wife for not bringing a gift for their baby. He wrote a cheque stating ‘this is for baby’; however, he did not indorse the cheque. He then put it into a safety deposit box. He died a short while later and the question was whether the cheque was valid either by an outright gift or whether the father made a valid declaration of trust. |
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Jones v Lock (1865) (continued) |
Held The gift failed as the formalities of indorsement had not been complied with. Where an absolute gift is attempted which fails for not following proper formalities the court will not treat a failed gift as a declaration of trust. |
