Certainty of Intention

No explicit trust will be made unless there is a reason for it to exist. The easiest
way to prove intent is via a written document that expresses the mutual desire
of all persons involved to create a trust. Yet, as stated by the court in the case
of Kinloch v. Secretary of State for India, the word "trust" does not have any
special meaning. The usage of the term "trust" in the contract suggests that
this intent was intended (Re Harrison, 2005). The issue revolves around
whether the settlor intended to impose a legally binding responsibility on the
trustee to hold and manage the property for the benefit of the designated
beneficiary. As a result of Lambe v. Eames, we now distinguish between
imperative words that indicate a command or need to do action, and other
phrases. When someone says these phrases, they may be implying that they
can trust them.
When it can be shown beyond a reasonable doubt that the settlor or testator
intended to create a trust, this satisfies the "certainty of purpose" criteria.
When someone uses the term "trust," they are usually only referring to one
possibility when they make that statement. According to the Paul v. Constance
decision, in order for a trust of personality to be formed informally, the settlor
does not truly need to be conscious of his conduct, nor do explicit words need
to be employed.
Since there are so many different forms of trusts, deciding whether or not they
are legitimate may often depend on how wills are interpreted in order to
ascertain the likely intentions of the testator. If the testator uses asset
management strategies that, at first glance, seem to be very similar to trusts
but are, in reality, quite different, then there is a possibility that confusion may
result. Wills sometimes incorporate a variety of bequests with varying degrees
of flexibility; for an example, see the case of Re Ford.
In the case of Re Ford, the testator’s sister was given complete ownership of the
testator’s shares in order for his wife to be eligible for an annuity payment. As
the value of the stock went up over what was required to pay for the annuity,
the question of why the sister had kept the extra money emerged. Sargant J.
believed that the situation was troublesome due to the fact that the sister was
hoarding the more money for her own personal use rather than for the benefit
of the heirs.
Precautionary language and sham devices are two of the biggest obstacles to
providing assurance of intentions. The testator in the case of Mussoorie Bank
Ltd. v. Raynar 1882 used precatory language, which is wording that is used in
wills to convey supplication or appeal.
In the case of Mussoorie Band Limited v. Raynar, it was clear that the
testator's purpose was for his wife to have the opportunity to enjoy the land
prior to their children receiving it. But for how much longer did he want her to
keep the property in trust for their children? For the rest of her life, for
example.
On the basis of these conceptions, the courts established the obligations of
trust, with judgments such as Palmer v. Simmonds from 1854 serving as an
example. The notion of precatory trusts was governed by various decisions that
were handed down throughout the 19th century. Yet, in the case of Lambe v.
Eames, the courts chose to dismiss the testator's offensive statements. Lambe's
earlier legal precedent was bolstered by the Supreme Court's ruling in the case
of Mussoorie Bank, in which the court categorically rejected the precatory
argument.
Yet as the Comisky v. Bo writing-Hanbury case indicates, given the right
circumstances, even words that seem ominous may be regarded seriously. This
was the conclusion reached in that case.
According to the decision in Comisky v. Bo Writing-Hanbury, the phrase "in full
confidence that her death will devise it to such one or of my nieces" constitutes
a trust. This is because the phrase "in the event that the wife failed to devise
the property to one or more of the nieces herself, it should be divided amongst
them equally" immediately follows it. In this case, the wife failed to leave the
property to one or more of her nieces. It should not have been a surprise that
the testator intended for his nieces to receive the property after the death of his
wife. Since she was so dependent on the trust for the rest of her life, she made
certain bequests to her nieces in her last will and testament.
In the context of certainty of intention, the establishment of a sham trust is
defined as an equitable property transaction that gives the appearance of
divesting the settlor of his interest in the trust property in accordance with the
written terms, but which does not actually do so because the settlor did not
intend to establish a trust of the kind that the written terms represent. This is
referred to as a "sham trust." As the case of Lewis v. Condon demonstrates, a
trust was not formed for the reasons for which it was intended, and as such, it
is not a sham mechanism. A device that is used with the intention of deceiving
other parties about the nature and worth of the owner's assets is referred to as
a sham device. It's possible that the trust itself isn't even the point of the
shame; rather, it might be that the parameters of the trust are what are
designed to mislead people.
It is not considered a sham under the law since the settlor is not intentionally
trying to mislead anybody in the second case; rather, it is used as an example
of how the settlor's goal differs from the trust's stated criteria. The second
possibility involves the assets of a wealthy person being moved to a trust that
is located abroad. It is important to keep in mind that, in contrast to a bare
trust, the settler of a normal trust case is unable to continue to treat the trust
property as his own given the conditions of the case.
Since the settlors no longer have beneficial ownership of the trust assets, it is
impossible for anyone who has a claim against the settlor or his estate upon
his death, such as creditors, a former spouse, or heirs, to claim any portion of
the trust property. This includes anyone who was married to the settlor (if the
settlor resides in a jurisdiction where heirs or dependents have legal claims
against his estate that cannot be defeated by his will).
Many settlors consider this to be one of the most significant benefits associated
with the inter-vivos trust. What happens, therefore, if the person who
established the trust is told that, much like a living will, it permits him to
direct the trustees to handle his property in accordance with his preferences
both while he is still alive and after he has passed away? The purpose of a bare
trust is to ensure that the transferor of property continues to have both the
legal and beneficial ownership of the asset (jersey case). As a consequence of
this, his creditors may try to seize it, it will be considered community property
in the event of a divorce, and it will be included in his inheritance once he has
passed away.
In these kinds of circumstances, the degree of certainty of intent is increased in
a different way: does the settlor intend to lose control over the trust assets by
engaging in a transaction or does he believe, particularly in light of the sales
pitch that was made to him that he will continue to be the trust's beneficial
owner? In a similar vein, one may draw a contrast by using the term "illusory
trust." Even though the trust seems to be for the benefit of a number of
beneficiaries, the trustee or settlor (especially when the trustee is also the
settlor) functionally has complete control over the trust's assets and is free to
do anything he pleases with them, including distributing them to himself. In
other words, the trust is an "illusory trust" (clayton v clayton).
If this scenario were to play out, the influence of a "letter of wishes" would
undoubtedly make the challenge more difficult. It is also possible for the settlor
to establish an offshore trust in the form of a wide discretionary trust. This
kind of trust provides the trustees with extensive discretionary jurisdiction.
Even though it often includes instructions on how to utilize the dispositive
discretions, the settlor's letter to the trustee is not a legally binding document.
This is true despite the fact that it frequently includes such instructions. In the
case of Chen v. Ling, 2000, the court came to the conclusion that the settlor's
letter of desires employed such forceful imperative language that it was evident
that the settlor meant to bind the trustees. This was the conclusion reached by
the court. As a consequence of this, it was concluded that the letter of desires,
and not the supposed trust document, adequately portrayed the conditions
under which the assets were really delivered to the trustee on trust.
As was the case in Jones v. Lock, it may be difficult to tell if the remarks of a
person are meant to form a trust or just to secure a future gift. He gave the
nurse a check for $900 and told her, "See you here, I give this to youngster,"
but he died away before he could finish the transaction since the nurse
informed him that he had forgotten to bring anything for his little son.
Notwithstanding its compassion, the court did not believe that the father's
conduct demonstrated that he could be trusted with the child. Even though he
planned to handle the contents of the check for the benefit of his kid, he
insisted that they be treated as his personal property and treated as such until
he had finished making his arrangements with his attorney. According to the
interpretation that the court arrived at after reading his statement, all that it
showed was that he was now able to financially maintain his kid.

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