Abstract

AbstractThis article argues certainty in trusts is better understood by recognising a fourth certainty: “distributional certainty”. Distributional certainty is required in private trusts that involve dividing the property between beneficiaries: their shares must be clear. Distributional uncertainty is not, as usually understood, merely an instance of uncertainty of property: it has differing consequences, special resolution techniques, and may explain “administrative unworkability” in discretionary trusts. Distributional certainty is not required in charitable trusts. But this is not, as usually understood, merely an instance of the rule that charitable trusts do not need certainty of objects: it is an independent proposition.

Highlights

  • This article argues certainty in trusts is better understood by recognising a fourth certainty: “distributional certainty”

  • To emphasise more explicitly than is currently done that where a settlor purports to declare a trust involving dividing the property between beneficiaries, the law requires sufficient certainty as to the beneficiaries’ shares; or, put more colloquially, within the trust there needs to be “who gets

  • We shall see below that currently, in so far as distributional certainty is recognised at all – very indistinctly – in the context of private trusts it is invariably seen as merely part of certainty of subject matter; while in the context of public, charitable, trusts it is typically seen as part of certainty of objects

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Summary

THE CERTAINTIES NEEDED TO CREATE A TRUST

The “three certainties” required to declare an express private trust were famously stated by Lord Langdale M.R. in Knight v Knight.[1]. We shall see below that currently, in so far as distributional certainty is recognised at all – very indistinctly – in the context of private trusts it is invariably seen as merely part of certainty of subject matter; while in the context of public, charitable, trusts it is typically seen as part of certainty of objects. This contrast – the same issue classified in two different ways – helps to expose the confusion at play. Charitable, trusts will be considered – where distributional certainty is not required – separating that proposition out from the rule that “Charitable trusts do not require certainty of objects”

Certainty of Property
Consequences If There Is No Certainty of Property
A FOURTH CERTAINTY
Why Separate Out Distributional Certainty?
Consequences If There Is No Distributional Certainty
Court’s duty to infer intention where possible
Beneficiary’s implied right of selection
Discretionary Trusts and Distributional Certainty
CHARITABLE TRUSTS
CONCLUSION
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