Chapter 4 Multiple choice questions

. In which one of the following cases would the testamentary disposition take effect as a trust?

I leave £100,000 to B, feeling confident that B will look after my uncle.

I leave £100,000 to B desiring that B should distribute it amongst my cousins.

I leave £100,000 to B, with the intention that she should hold it for the benefit of my nieces.

I leave £100,000 to B, requesting that she should provide for the grandchildren.

. K Ltd ran a mail order business, the customers of which paid either a deposit or the full price in advance. Fearing insolvency, the company set up a 'Customers' Trust Deposit Account' to hold customers' monies until their goods were delivered to them, and thereafter paid customers' monies into that account. Soon afterwards K Ltd went into voluntary liquidation. What would be the outcome?

The money would pass to the Crown as bona vacantia.

The customer trust would be void as an attempt to defraud creditors.

A resulting trust for the creditors.

An express trust for the customers.

. What is the consequence where the will of X leaves the "bulk" of his residuary estate to Y?

No gift or trust.

A gift of the greater part of the residue to Y.

A gift of the bulk to Y.

A resulting trust to X.

. I have 80 cans of cola drink which are virtually identical, although some are a day or two older than the others and one or two have slight dents. If I declare a trust of "20 cans of cola drink from my 80 cans of cola drink", what have I achieved (assuming the object is certain)?

A trust that fails for uncertainty of object.

A valid trust of one quarter of the lot?

A valid trust of 20 cans of my choosing.

A valid trust of 20 cans of the beneficiary's choosing.

. A testator left realty and personalty to his wife by his will 'for the term of her natural life to be disposed of as she may think proper for her own use and benefit', providing further that, 'in the event of her decease should there be anything remaining of the said property or any part thereof', the said remainder should pass to certain named persons. What interest does the will create for the wife?

Nothing

A gift subject to a charge.

A life interest for the widow.

An absolute gift to the wife.

. Which of the following types of trust is void?

A trust for the saying of private masses.

A trust for the invention of a new pan-European language.

A trust for purposes beneficial to the public.

A trust to build a swimming pool for the employees of Cocorp Ltd.

. McPhail v Doulton (Re Baden's Deed Trusts No. 1) [1971] AC 424, House of Lords. Which of the following dispositions is a mere power of appointment and not a trust?

£10K to my wife to be distributed amongst my cousins if she may think fit.

£10K to my wife to be distributed amongst my cousins as she may think fit.

£10K to my wife to be distributed amongst my cousins as she may think fit and any money not applied this year to be retained for future distribution.

£10K to my wife to be distributed at her discretion between my cousins.

. Which of the following is NOT an accurate summary of the judgments in the Court of Appeal in Re Baden's Deed Trusts (No. 2) [1973] Ch. 9?

Stamp LJ took 'relatives' of X, to mean X's statutory next-of-kin.

Sachs LJ took the view that even if 'relatives' was given 'a very wide meaning', i.e., any persons who can 'trace legal descent from a common ancestor', there would not be conceptual uncertainty and the trust would be valid.

Their lordships agreed that, while conceptually certain, a discretionary trust for "relatives" must fail on the ground of administrative uncertainty.

Megaw LJ suggested, that a discretionary trust will only be valid where there is evidence that a 'substantial number' of beneficiaries will fall within the class.

. In this chapter we discovered the meaning of the 'right of survivorship'. Which of the following definitions fits it best?

It is a way of inheriting property outright where an asset is owned 'jointly', so that each owner can be said to own the whole of the asset, and one of the joint tenants dies.

It is a way of inheriting property in shares where an asset is owned 'jointly', so that each owner can be said to own the whole of the asset, and one of the joint tenants dies.

Where an asset is owned 'jointly', so that each owner can be said to own the whole of the asset, on the death of one joint tenant the survivor remains owner of the whole by 'right of survivorship'.

It is a way of inheriting property outright where an asset is owned by joint tenants in shares and one of the joint tenants dies.

. Courts have traditionally found ways of making trusts sufficiently certain for practical purposes and that they did so successfully in Hunter v Moss. All that is required in theory and for practical workability is that the size of the total bulk be identified as well as the size of the part to be held in trust (whether the part is identified by number of units or by a percentage proportion of the whole). Trustees can then be held to their fiduciary duty to keep the trust part separate from the rest. This summarizes the argument of which scholar?

Professor Sarah Worthington

Professor David Hayton

Professor Peter Birks

Professor Paul Matthews

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