The current approach to certainty of objects in discretionary trusts creates more uncertainty than it resolves. Discuss.

Introduction: the test for certainty of objects previously required a complete list of beneficiaries (IRC v Broadway Cottages). While the new test in McPhail v Doulton allowed more discretionary trusts to be upheld, the case law in this area remains uncertain and confusing.

McPhail v Doulton: clearly set out the test for certainty of objects, as per Lord Wilberforce. The test is the same as for fiduciary powers (Re Gulbenkian's Settlement).

Discuss whether Lord Wilberforce's reasons for applying the same test are convincing – should a trust for which it may not be possible to identify all the potential beneficiaries be valid?

Re Baden's Trust (No 2): the court had to decide how to apply the test set out in McPhail v Doulton. A strong knowledge of the facts and differing reasoning of the Court of Appeal is vital if you are to answer this question well.

Discuss the differences between the approaches of Stamp, Sachs, and Megaw LLJ. The diversity of opinion within the court is indicative of the uncertainty of the test itself.

Discuss the advantages and disadvantages of each approach.

Discuss and illustrate the central idea of 'conceptual certainty'. How is it distinguished from evidential certainty? Do the different approaches in the Court of Appeal use 'conceptual certainty' correctly? (Emery provides an excellent discussion of these issues (see, chapter 3 key debates).)

Can conceptual uncertainty be cured? This issue highlights further uncertainty in the current approach to certainty of objects for discretionary trusts. Discuss the different reasoning adopted in Re Tuck's ST. Note: this is an issue on which textbook authors also disagree!

All of these issues are of particular importance to trustees, who may be held liable for breach of trust if they distribute property incorrectly.

Conclusion: draw together the points made. Reflect on the reasons for changing the test for certainty of objects for discretionary trusts – do the benefits outweigh any problems?