Equity and Trusts : Assignment
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Added on 2020-10-05
Equity and Trusts : Assignment
Added on 2020-10-05
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Equity and Trusts
The literal meaning of equity is fair and just. On the other hand, in trust a person (trustee)hold properties of another person (beneficiary). In every country, there is law governing equityand trust which is a wide concept and covers number of aspects. These law are meant to provideequal treatment to all the people living in UK. Also, amendments are done time to time forkeeping the number of laws free from all the loopholes. Every person is under an obligation tofollow these. According to R Clements and A Abass, in UK, Equity is considered as an uniquebranch of English legal system which comprises number of principles formed by Courts ofChancery. The main objective of these is to bring a balance to Common law1. Furthermore, thereare different types of remedies available that can be used for getting justice in the matters ofdisputes. It involves number of parties which are settlor original owner of property, testator isone who is responsible for creation of trust in order to make it effective on the event of death.Furthermore, trustee is the one who hold legal possession of property for the benefit of othersand beneficiary is the person for whose benefit the trust is created. Equity has maxims which regulate its activities. These are principles which describesbasics of an equity. These are the foundation which must be followed in every case. The numberone maxim being, an innocent person will be suffered in case of any wrong act. Remediesprovided as injunctions or specific performance may be sought by beneficiary in whose caserights have not been given or manipulated under common law. In the words of McFarlen, equityfollows the law, this means that courts are under an obligation to apply common law at firstinstance and in case it fails to provide a fair decision, then equitable remedy will be applied2. Theother maxims are, remedy will be available only in case of a person has performed equitable in atransaction. Furthermore, the past records of person seeking remedies must be cleaned. Tin otherwords, there should not be any incidents of misrepresentation or fraud. Also, enforcement ofequity must be done within the right time which is prescribed. Any delay will disallow in equity.Together with this, equality must be served, this means that any business or property must bedivided equally. One of the important maxim is equity acts in personam, which means equityrelates to a person rather than their property. 1Clements, R. and Abass, A., 2018.Complete Equity and Trusts: Text, Cases, andMaterials. Oxford University Press.2McFarlane, B., 2018. Avoiding anarchy? Common law v Equity & Maitland v Hohfeld.Cambridge University Press.
A trust is classified into different types viz. Express trust, in which the intention of settloris expressed in advance about the entitlement of beneficiaries. It can be of two forms fixed anddiscretionary. Hudson has mentioned that constructive trust has objectives to provide justice,good conscience and equity3. It can be institutional or remedial whereby former is applicablewhen mentioned conditions have been fulfilled or achieved and latter is for seeking remedy ininjustice. Lastly, resulting trust is the creation of law which can be automatic,this occurs in thosewhen a trust is not created due to various reasons. Furthermore, resulting trust can be implied incertain situations. While discussing the whole topic, key matters such as powers and duties cannot be ignored. The power of trustee is limited up to the amount of money invested in theproperty. There is a fiduciary relationship between trustee and beneficiary which must not bebroken. Also, trustee is one who administers property. Furthermore, there are number of powerssuch as, power to give receipts while setting free a third party from all the liabilities owed to thetrust. Another power is to compromise, in this trustee will make efforts to form situations alongwith terms which have been negotiated in order to settle down the matter. Also, trustee is underduty to utilise income generated from property and maintain capital in case of infantsbeneficiaries. The other powers being power of advancement which empowers trustee to advancecapital to a beneficiary instead of keeping it aside for making more money. Powers are nothing without carrying duties in the right way. These are the responsibilitieswhich are expected by beneficiaries from the trustee of their property. When a trust is created,the possession of the property is legally transferred from beneficiary to trustee who gets into afiduciary relationship for the management of property on which trust is created. The number ofduties are appointment of agents, custodians and nominees. This duty emphasises trustee maydivide his work through delegation trusteeship to professionals. Furthermore, there are specificsituations in which this duty can be exercised such as if the appointees are acting in the samecapacity or the appointee is a body corporate which is controlled by trustees themselves or theagents, custodians etc. are a body corporate registered under s9 of Administrative Justice Act,1985. This duty makes it easy for trustee to get required amount of help from the person who hasskills and qualification required by trustee. Agent acts in fiduciary relationship and carries workaccording to instruction provided by trustee. An individual can be appointed by assigning powerand authority to act on behalf of trustee. Also, no beneficiary can be appointed as an agent. This3Hudson, A., 2016.Understanding equity & trusts. Routledge.
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