Fully Secret Trust and Half Secret Trust: Understanding the Nature and Differences

This article explains the nature and differences between fully secret trust and half secret trust. It also discusses the essential requisites for proving the existence of a fully secret trust and the validity of a half-secret trust.

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The nature of Trust needs to be understood before drawing the distinction between
fully secret trust and half secret trust. Although the concept of both of these types of trusts is
similar, however they exhibit different nature from each other. A fully secret trust is created
when a settlor interests a gift to an individual who has been made aware of the intention of
the settlor that he has been assigned as a trustee for a beneficiary or more. It is considered as
a fully secret trust as its existence is not quite apparent from the will. On the other hand, a
half secret trust is created when the matter of the trust is left for the trustee to decide, but
there are no available details pertaining to the objective of the trust1. This characteristic
makes the existence of the trust partly evident and partly secret. The reason behind creation
of such kind of trust has been attempted in the case of Blackwell v. Blackwell2.
One of the issues of the secret trust is that the trustee for the beneficiary having no
idea about the trust would not be able to claim their gifts by the settlor. The benefits accrued
from the fully secret and the half secret trust must be evaluated before examining its
differences. The fundamental principle of the law of trust is that when a trust is inter-vivo in
nature then formalities are not required to be carried out. Otherwise in case the trust is given
out by way of written document then d formalities pertaining to the creation of a trust and a
will needs to be observed as per the Wills Act 1837. By way of determining the nature of the
formalities of the creation of trust and where it can be said that the making of the fully secret
and half secret trust does not comply with the formalities or requirement creating a trust.
Fully secret trust faces the issue of lack of evidence in terms of their terms and existence.
In the case of Ottaway v Norman, the test of establishing the existence of a fully secret trust
was laid down3. The essential requisites for proving the existence of a fully secret trust are:
1 Levine, Julius B., and Randall L. Holton. "Enforcement of Secret and Semi-Secret Trusts." Prob. LJ 5 (1983):
7.
2 Blackwell v Blackwell (1929) AC 318
3 Ottaway v Norman [1972] 2 WLR 50

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1. The settlor or testator’s intention to put the primary beneficiary under an obligation to do
something in favour of the secondary beneficiary;
2. The testator must communicate such intention with the primary beneficiary; and
3. The primary beneficiary must accept the proposition of the testator or settlor by express or
implied ways.
In the case of Re Boyes, Justice Kay is of the view that the communication between the
testator and the beneficiaries must allow the trustee the chance to decline his obligation, as he
cannot be forced or manipulated to do his job; his actions must be his own and not compelled
by the testator4. There must be clear acceptance of the obligation by the trustee pertaining to
the offer of the testator. In the case of Wallgrave v Tebbs, VC Wood held at acceptance of the
obligation can be communicated by the primary beneficiary in one of the two ways; the
trustee either directly accepts the offer all does not decline it through implications5.
In case of half secret trust, the beneficiary is give the status of a trustee, which is declared
expressly in the will but not the other terms and conditions of the trust. The essential requisite
of a half-secret trust to be valid is the same as that of the fully secret trust as held in the case
of Blackwell v Blackwell6. However, the only yet a major difference between them lies in
terms of the communication of the terms of the trust. In case of half secret trust,
communication between the settlor and the trustee must be made either at the time or before
the execution of the will, while in case of the fully secret trust the communication needs to be
made after the death of the testator.
These trusts comprise of an array of practical rules, which requires the testator to
communicate with the trustee in case he changes any of the rule. In case where there are one
than one trustee who are the co-owners of the property, it becomes complicated to
4 Re Boyes (1884) 26 Ch D 531
5 Wallgrave v Tebbs (1855) 25 LJ Ch 241
6 Blackwell v Blackwell (1929) AC 318

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communicate with them regarding the amendment or alteration of the terms of the trust deed.
Therefore, it can be seen that there lies very little distinction between the two types of trust.
Thus, there is a strong argument pertaining to the notion of prevention of fraud by these types
of trusts7. Although it can be argued that the lack of formalities of the fully secret as well as
the half secret trust leaves them protection less, however, it is made sure that a fully secret or
a half secret trust must comply with the three essential requisites laid down under the
Ottaway v Norman case8. Incompliance with the requisite, many cases have been struck down
by the court which did not assure the trustee to be able to divide the estate successfully9.
Many theories has been used to support and analyse the purpose of the fully secret as well
as the half secret trust. However, none of the theories could provide for a surety that it these
kinds of trusts are not complex. The court has held in many instances that the fully secret and
the half secret trusts should be removed entirely for they are complicated and severely lacks
formality of creation. Therefore, there are positive approach as to the removal of these types
of trust however, the benefits of these trusts cannot be overlooked, which has been made use
of over the years. Therefore, in spite of several defects and complexities, the secret trusts are
a part of the trust law.
7 Penner, James. The law of trusts. Oxford University Press, 2016.
8 Ottaway v Norman [1972] 2 WLR 50
9 Re. Boyes (1884) 26 Ch 531

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Bibliography
Books and Journal articles
Levine, Julius B., and Randall L. Holton. "Enforcement of Secret and Semi-Secret
Trusts." Prob. LJ 5 (1983): 7.
Penner, James. The law of trusts. Oxford University Press, 2016.
Case Law
Blackwell v Blackwell (1929) AC 318
Ottaway v Norman [1972] 2 WLR 50
Re Boyes (1884) 26 Ch D 531
Wallgrave v Tebbs (1855) 25 LJ Ch 241
Legislation
Wills Act 1837