Secret and Half secret Trust justification essay

Our response will include an examination of secret and half-secret trusts and
their underlying motivations. The statement given by Viscount Sumner provide
a sound basis for such faith. To see if the benefits really do exceed the
drawbacks, we'll examine this line of reasoning in the next section. At the end
I'll take a look at whether or not the reasoning behind the fraud holds up to
more tests.
These trusts with very similar titles in length imply that their fundamental
functions are equal. When settlers want to leave apparently large gifts to
certain recipients, they would often set up secret trusts. A secret trust is one
that is not readily apparent to an outside observer of the will. A trust is created
when property is entrusted to a trustee but the terms of the trust are not
specified in a will. The reasoning is predicated on Viscount Sumner's train of
thought regarding the Blackwell vs Blackwell case. A potential beneficiary may
legitimately claim settlement funds without a trust by taking advantage of the
settler's goodwill. Even if the trust was never formed, this would still be the
case.
The pros and weaknesses of this argument cannot be determined until the
question of justification is settled. Reason is not necessary since there are
benefits to keeping the trust's existence secret or to disclosing it in a limited
fashion.
One of the most important principles of trust law is that no special procedures
or formalities are required to create an intervivos trust. However, the Wills Act
of 1837 specifies certain processes which must be followed if the trust was
formed by a written document such as a will. In a series of landmark instances
spanning several decades, the necessity of following certain formalities in
English law has been debated, contested, and ultimately established. These
decisions have been made over the course of many years. Secret and half secret
trusts do not satisfy any of the prerequisites for these positions, as is plainly
obvious when one examines the inner workings of these systems. In the
perspective of the law, they carry the same weight as a trust created during the
person's lifetime.
The earliest trust legislation and existing examples of secret and half secret
trusts provide the strongest support for the "prevention of fraud" thesis. These
two categories of trusts have been there since the very beginning of trust law.
Equity law has substantially borrowed from the core principles of equity
throughout its evolution. In concerns of justice, the most significant proverb is
that "substance above form" is required. This suggests that equity will consider
the aim to have been accomplished even if there is no means to verify that it
has been met, even if there is no way to prove that it has been achieved. As the
common law was as unyielding as a rock, efforts were undertaken to soften its
rigidities in order to forward the cause of equality. It is wiser, the proverb goes,
to give in to the settler's demands than the trustee's.
Moreover, equity supports the trustee's ethical beliefs. Consciousness has
always been the distinguishing feature of fairness. One of equity's central
tenets is that it prohibits taking advantage of someone dishonestly through the
strict application of the common law. This guiding notion is central to the idea
of equity. This provides more support for Viscount Sumner's contention that
such actions would be ruled immoral by a court of conscience and that the
formation of secret and half secret would be necessary to prevent fraudulent
activities.
The crucial element demonstrates that it is impossible to tell the difference
between a fully secret trust and a half secret trust. In the case of Blackwell
Lord Sumner argues that the two trusts are essentially the same. The adoption
process itself, as opposed to the result, is the only real difference. The danger
of fraud can be reduced by creating two trusts that are so identical to one
another that they cannot be distinguished from one another. Because to the
absence of protocol involved, it is possible to disprove the common belief that
participants in secret and half secret trusts are made public. In reality, the
outcome is very different. All inter vivos trusts, even ones that are secret or
only partially secret, are affected by the three certainties. In other situations,
courts have been reluctant to uphold this type of informal trust on the grounds
that it does not give the trustee enough assurance that the gift would be
dispersed off in a proper manner.
Many advantages and disadvantages have been identified with this plan of
action. The first cause for alarm is that the case law discusses issues like
ambiguity and vagueness that have nothing to do with fraud and the case of
Ottaway vs Norman was one such instance. Once the owner passed away the
housekeeper Norman was allowed to claim some of their belongings from their
inheritance. Ottaway was alleged to have agreed with Norman that he would
take over ownership of the land in the case of Norman's death. The evidence
does not show that Norman omitted anything from the will intentionally to
conduct fraud or other motivations and despite this Ottaway was able to show
proof of a secret trust. This should never have been allowed for the sole sake of
avoiding fraud.
The same problems with the evidence plague Viscount Sumner's argument as
did the preceding argument. Despite circumstantial evidence of an agreement
the court in McCormick vs Grogan found that Grogan had not committed
equitable fraud and that his conscience was unaffected. This was because it
was not obvious what the arrangement entailed. Yet, the court concluded that
Grogan did not engage in equitable fraud. The dilemma stems from the fact
that the court system must examine each individual case rather than establish
a single, unequivocal standard. There was a dispute over the trustee's
authority in Re Keen, which created new difficulties in the process of admitting
evidence. The court likened the situation to that of a ship's captain who must
remain in command while receiving orders in an unknown format. One would
reasonably wonder how a trustee might be held accountable for dishonesty or
fraud in their position if they were not aware of the responsibilities they were
taking on. Despite this, in Keen's view, an underlying level of trust had already
been formed.
The main possible critique is that the explanation makes use of trusts that only
provide partial secrecy. There is a major distinction between the two trusts,
notwithstanding Viscount Sumner's worries because the trust is only half
secret and so the beneficiary named in the will as trustee cannot legally access
the trust's assets. The trustee's assets would be dispersed to the beneficiaries
of the estate if the trust were to be terminated. As the Blackwell defense reveals
half secret trusts it cannot stand on its own but there may be pushback
against this criticism. The investigation in Re Dale showed that beneficiaries
and/or settlers might conduct fraud even when the trustee stood to benefit
from the plan. While there are benefits to a comprehensive approach it's also
likely that much of it is a fabrication meant to deflect rather than stifle
criticism.
Yet most of the issues with the study stem from alternative analyses, which are
now more widespread than the concept of fraud prevention. Hanbury argues
that it's not enough to say that intent, communication, and permission are the
three pillars on which secret trusts rest.
The Viscount Sumner study, which has merits and flaws but has received no
reaction, remains fruitless. Based on the principle of stare decisis, such a
replacement product really already exists. The ruling that trusts created
outside the limits of a will, such as a secret or half-secret trust, could be
enforced was established in the case Cullen vs Attorney-General for Northern
Ireland. When the courts decided to hear Cullen vs Attorney-General for
Northern Ireland, they created this rule. The will just acts as supporting
evidence for the stated intentions of the parties. You may relax about the lack
of paperwork since the only trusts that need paperwork are those that are
written into a will.
In the case of Blackwell vs Blackwell, Viscount Sumner made his "fraud"
argument in this very same case, the identical idea was initially put out. Lord
Warrington, who reached a different result, argued that the relationship
between the settler and the trustee was crucial. Due to the trustee's assent, the
provisions may be enforced through the use of equity. The focus of this debate
is not on the likelihood of fraud, but rather on the significance of the
relationship, although one might make the case that avoiding fraud is another
use of this principle.
In the case of Re Young the settlement's trust was administered by the settler's
wife, and she disbursed 2000 pounds to the witness to the will. Section 15 of
the Wills Act states that witnesses to a will are not entitled to any benefit or
any profit so the trust established by the will would be null and void and
unenforceable. The court ruled that the half-secret trust had nothing to do with
the decedents will because its purposes were not clearly stated. Just the
donation's legality was in question, not the honesty of the trustees. The need
for a new theory to justify the legitimacy of Secret and half secret trusts is
evidence that many concepts are involved. No effort was made to accommodate
individuals who were deemed invalid and who, according to conventional
regulations, would have caused issues even though none of the two
possibilities indicated above was adopted. The Family Law Act of 1987, which
provided for more leeway in the law, made this idea impossible to implement.
Yet, this retrospective approach shows how trust law decisions in this field may
evolve with the times.
While looking at advantages as well as the disadvantages, disagreement exists
about the "fraud prevention" claim. Yet, it turns out that this justification isn't
enough, especially when considering trusts with sketchy disclosures. Trusts
like these might be seen as serving two purposes: protecting beneficiaries from
deception and keeping the trustee responsible for any promise they make.

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