Equity and Trusts Essay Example | Topics and Well Written Essays - 1000 words

Equity and Trusts - Essay Example The elements are that there is an intention that there be property given to a trustee for use of a beneficiary or beneficiaries.1 Moreover, there must be a certainty that a trust is what was truly was intended, and not a bailment, gift or agency relationship.2 Additionally, there must be certainty about the terms of the trust – what is the property, and who is to benefit from the property.3 The trust must also be for the benefit of people, and not for a purpose, which means that the beneficiaries may be able to decide how to use the property.4 This is known as the three certainties – there must be a certainty of intention, subject matter and object.5 There must also be, for an express trust, a transfer of property to the trustee.6 There is some question, however, about this particular trust. While it appears to be for the benefit of beneficiaries, in that the people of the company are who would benefit from the trust, the trust might also be construed as a purpose trust , which means that the trust is set up for the fulfillment of a purpose, not the for the benefit of a person.7 The court might construe the trust as being a purpose trust, because it was set up for the purpose of providing medical care and rest and recuperation care to the employees. ... Another possibility is that this money would be treated as a resulting trust.8 This would occur if the court assumes that the settlor of the trust are the people who contributed the money into the trust, and the trust itself fails, because of the lack of certainty of the objects of the trust.9 A resulting trust can also result when the objectives of the trust no longer become possible or relevant by the time of the transfer to the trustee.10 Alternatively, the trust could treated as a quistclose trust, which occurs when a creditor lends money to a debtor for a particular purpose.11 If the trust fails, because the purpose that the debtor was to use the property fails or cannot be fulfilled, then the money reverts back to the creditor.12 Either way, the money would be considered to be a resulting trust, which would mean that the settlors would retain the value of the money.13 This would mean, of course, that the trustees would not be able to use the money for other purposes – as with a quistclose trust, the money in the trust fund was to be used for a very specific purpose, which is to be pay for medical care and rest and recuperation care for any employee or the family of an employee who suffers injury or a medical condition arising from their work. This is what the fund was specifically set up for, and, since this purpose is no longer valid, the settlors would retain the money. This would mean that the people who contributed the money into the fund would retain the rights to the money, and the trustees would not be able to divert the funds for other things. Even if the court does not treat the trust as a resulting trust, it is still doubtful that the trustees would be able to use the funds for something else. Assuming that the trust is considered to be