Equity and Trusts Law LW2ETR: Secret Trusts Distinction Assessment

This essay critically assesses the distinction between fully and half-secret trusts within the framework of equity and trust law. It begins by introducing the Wills Act 1837 and its role in preventing fraud, then explains the concept of secret trusts, which are exceptions to the formal requirements of the Act. The essay defines and differentiates between fully secret trusts, where the trust and beneficiary are not mentioned in the will, and half-secret trusts, where the trusteeship is revealed but not the terms or beneficiaries. The discussion covers the rules governing both types of trusts, including the communication requirements, and explores the justifications for upholding them despite lacking the formalities of the Wills Act. The essay examines relevant case law, such as Re Kayford Ltd and Blackwell v Blackwell, to illustrate key principles. Finally, the essay argues for the abolition of the distinction between fully and half-secret trusts, concluding that the justifications for their existence are insufficient and that their enforcement leads to negative consequences. The essay adheres to the assignment brief's criteria, including accurate legal statements, case analysis, critical evaluation, and wider reading.

Running head: EQUITY AND TRUSTS LAW
Equity and Trusts Law
Name of the Student
Name of the University
Authors Note
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1EQUITY AND TRUSTS LAW
Introduction:
Wills Act is regarded as the anti-fraud device that aims to assure that the testator wills
are genuine by adhering with the different formality procedure. Under the “section 9 of the
Wills Act 1837”, the last wish of the testator must be made in writing and the same is signed
by the testator whose signature should be seen by the two people1. Nevertheless, there are
exception to the “section 9” particularly the secret trust.
Usually, the secret trust originates under circumstances where the settlor
communicates the proposed executor that the settlor would be passing on the possessions to
him for his or her trust holding for the intended beneficiary following the death of settlor
despite that there is no kind of formal mention is made in the will2. The court of law would
uphold the trust despite the fact that it fails to meet the formality procedure under section 9
except the intended trustee does not agrees to be trustee in the first place.
There are two forms of secret trust, half secret trust and the full secret trust. In the
fully secret trust, the presence of trustee and terms surrounding the trust are not present in the
will whereas in the half secret trust, the trusteeship is present in the will but no explanation is
made regarding the terms and beneficiary3. The essay aims to explain the difference between
the fully and half-secret trust and justifying the removal of it entirely.
1 Martin, Jill E., and Harold Greville Hanbury. “Modern equity”. (p. 540). Sweet & Maxwell,
2015.
2 Bankman, Joseph, et al. “Federal Income Taxation”. (p. 380). Aspen Casebook, 2018.
3 Fox-Decent, Evan. "The Constitution of Equity." The Philosophical Foundations of the Law
of Equity (p.236). (Oxford University Press, 2019 Forthcoming) (2019).

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Discussion:
A fully secret trust originates under circumstances where the testator leaves the
money in the name of beneficiary who based on the face of will seems to take it completely
and also a trustee for somebody else4. The trust is considered secret, while the will is
considered public and can be evidently seen once the testator dies furthermore the terms
related to trust is contained in another document which may remain private. On the other
hand, the secret trust originates under circumstances where the testator leaves the property to
the person that is mentioned to be a trustee of the will. Therefore, it becomes evident that a
person cannot entirely take the property.
The aim for such kind of preparation are numerous but the main intention of the
testators is keep the trust secret for whatsoever motive, the dispositions that is made by them
for their property at the time of death. As per researchers, the will of the deceased person is
regarded as the public document and the family members would be able to notice the sum
that is received by them. Alternatively, if the testator does not want this to happen, then he
might simply leave the money to a “front” to whom he has earlier instructed at time of
disposing the property5. To provide the trust existence a written or an oral evidence may be
sufficient and a contradictory expression of the wills terms can be obtained. In regard to all
the trust, the evidence should clearly represent the intention of creating a trust for binding the
beneficiary under the will to execute the wish of testator.
4 Buenker, John D. The Income Tax and the Progressive Era. (p. 276). Routledge, 2018.
5 Newton, Kenneth, Dietlind Stolle, and Sonja Zmerli. "Social and political trust." The
Oxford Handbook of “Social and Political Trust” (p. 37) 2018.

3EQUITY AND TRUSTS LAW
The rules that governs the half-secret trust seems to be similar with those that of the
secret trust except under one vital aspect. The trust that originates from the fully secret trust
should be communicated to the trustee an any point of time prior to vesting the property in
them or any time prior to the death of the testator. Nevertheless, in the situation of half-secret
trust the communication should be made prior to or at the same time when the will is made.
There may be nothing that appears objectionable regarding the testator that wishes to keep the
disposition secret that is made upon death6. All the same, all these dispositions should adhere
with the provisions stated under “section 9 of the Wills Act 1837” and it should contain a
valid, signed and attested will.
Undoubtedly, the fully secret trust hardly complies with this, the secret trust is
regarded as the means based on which the testator is able to bypass the formality obligation
that are laid down under the “Wills Act 1837”. The entire theory of formation relating to
secret trust is that Wills Act hardly has anything to do with the matter7. Fully secret trusts
have specific testamentary characteristics that are valid in spite of the fact that the lack of
testamentary formalities since the trustee accepts the trust during the settlor’s lifetime. Based
on the face of will, the beneficiary is mentioned to be trustee in the will, the true beneficiary
in the trust is once again not stated in the will.
The customary opinion is that the secret trust is considered as the example of maxim
where equity would not allow the statute to use it as the tool of fraud. If the beneficiary under
the will acknowledged the responsibility of holding the property on trust for others then it
6 Virgo, Graham. “The Principles of Equity & Trusts”. (p. 156). Oxford University Press,
2018.
7 Hudson, Alastair. “Understanding equity & trusts”. (p. 181). Routledge, 2016.

4EQUITY AND TRUSTS LAW
would completely fraudulent, if he is later permitted to deny the trust by stating that it was
void in not adhering with the statute8. The difficulty that surround the fraud argument is that
it is less easy to implement on the secret trusts.
The rationale for the half-secret trust that rises from the present day cases is very
different from that of the rationale surrounding the prevention of fraud that underpins the
cases on the fully secret trust9. The half-secret trust is only effective when they are treated as
having been combined in the will. It explains that they should precede with the execution of
will and that discrepancy with the wills may result the half-secret trust being unenforceable.
With respect to the half-secret trust, the “Wills Act 1837” still has nothing to do with the
matter.
The present day view relating to the basis of secret and half-secret trust is that they
originate completely out of the will and are not required to adhere with the Wills Act. Fraud
offer an historical explanation relating to the doctrine of secret trust that the doctrine
developed as the means of averting fraud10. Conversely, it is evident that the secret trust
might be set up under cases where there is no such possibility of fraud. It also becomes
apparent that by-passing the Wills Act is evidently not the motive that are usually behind the
such kind of trusts.
8 Nair, Aruna. Claims to Traceable Proceeds: Law, Equity, and the Control of Assets.
(p.169). Oxford University Press, 2018.
9 Hudson, Alastair. “Understanding equity & trusts”. (p. 181). Routledge, 2016.
10 Watt, Gary. “Trusts and equity”. (p. 54). Oxford University Press, 2018.

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As held in “ReKayford Ltd [1975] 1 WLR 279” the court of law held that it is well
understood that the trust may be formed without using any kind of words trust or confidence
the question is whether in substance a sufficient intention is necessary to create a trust that
has been manifested11. Whether or not the disposition of the trust is aimed at taking effect, a
trust is mainly dependent on the words that are used. As stated by the law court in “Re
Osoba [1979] 2 All ER 393” it is endeavour to determine the intention from the words that is
used in respect to the knowledge of relevant facts.
Alternatively, a floating trust was suggested in the “Ottaway v Norman [1972] 3 All
ER 1325” a trust is most likely to be imposed given that the trust is suspended during the life
time of donee’s and only attaches to the left over property upon the death of the donee’s.
Similarly, in the case of “Comiskey v Bowring Hanbury [1905] AC 84” it was stated that
on making a true construction of words of will, the disposition took the effect as the trust
under which the wife had a life interest12. The superadded direction states that the nieces in
this case must acquire the interest for any type of event which showed that the wife did not
had the intention of acquiring the absolute interest in the estate.
Finally, it should be discussed that which form of express or constructive trust does
the secret trust create? Because of the fact that the fully secret trust may be documented either
orally or in the form of writing and any point all through the lifetime of the testator it is
perhaps not an express trust. Express trust originates on the basis of the declaration that is
11 Dal Pont, Gino Evan. "equity and trusts”: (p. 198). Commentary and Materials. (2018).
12 Klinck, Dennis R. Conscience, Equity and the Court of Chancery in Early Modern
England. (p. 284) Routledge, 2016.

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made by the testator to the secret trustee13. Even though the absolute gift to the first donee in
the fully secret trust is made in writing, the other details of the trust are not made. In such a
situation the fully secret trust would become invalid if the trust was the express trust. Despite
everything researchers argue that express trust is formed even though it is existent outside of
the will however it does not comply with the statutory formalities.
As explained above, in majority of the cases, in order to express a trust, it should be in
writing. The half-secret trust declaration documentation is different from the fully secret trust
but they share the identical qualities relating to prevention of fraud. As held in “Blackwell v
Blackwell [1929]” the communication relating to half-secret trust should happen before or at
the same when the will is made14. This is because in half-secret trust it is evident from the
constitution of will that the trustee should hold the property on trust for the beneficiary. It is
easy for the testator to execute adjustment to his will is one wishes and no kind of further
communication by the trustee would be considered.
In an another example of “Peckham v Faria (1781)” there are two different types of
views which is explained regarding the reason for complying with the formality requirements
under the Wills Act which is not applicable on the secret trust. This includes the “dehors
theory” and “fraud theory”. The court of law in “Cullen v Attorney-General for Ireland
(1866) LR 1HL 190” held that secret trust under the “dehors” theory exists out of the will
and hence there is no application of will. The court further stated that the agreement among
the testator and legatee comprises of the declaration of trust.
13 Clements, Richard, and Ademola Abass. “Complete Equity and Trusts: Text, Cases, and
Materials”. (p. 157). Oxford University Press, 2018.
14 Bridge, Michael. Personal property law. (p. 215). OUP Oxford, 2015.

7EQUITY AND TRUSTS LAW
On conducting the comprehensive review of the secret trust and all the theoretical as
well as practical justification for imposing them, it is understood that secret trust must be
abolished. This is because not only these justifications are insufficient, but also enforcement
would lead to negative consequences. The unnecessary and unjustified doctrine of secret trust
should be abolished15. Away from being a simple historical peculiarity with unsubstantiated,
there are no better reasons for the law to impose them. The main reason in favour of
enforcing the secret trust is not only unfounded but also lead to negative consequences.
Irrespective of the constitutional justification, secret trust must be abolished as there are no
good reason for enforcing them. Launching the non-existence of reasons to have the secret
trust is vital because, even though it is constitutionally justified or place a statutory form,
there are no good reasons for keeping them.
The principles of secrecy fail to solve the underlying problems which results in social
repercussions over the wills. It would not be uncommon for the conflicts and emotional upset
to originate over a will. Secrecy fails to solve the emotional issues that is caused by other
dispositions particularly being written out of will16. The presence of doctrine of secret trust
might result in suspicious and paranoid attitudes among the beneficiaries, relatives and
friends. The other side of practical value of avoiding the challenge to such dispositions is that
the testator may lose the protection from fraud and misunderstood intents. Even though secret
trust is effective and necessary but it lacks constitutional justifications.
15 Pattenden, Rosemary, and Duncan Sheehan. The law of professional-client confidentiality.
(p. 132). Oxford University Press, 2016.
16 Treves, Adrian, et al. "Predators and the public trust." Biological Reviews 92.1 (2017): (p.
248-270).

8EQUITY AND TRUSTS LAW
Enforcing the secret trusts does helps in preventing frauds in situations where the
beneficiary knows regarding the secret trust that it is able to prove it and also willing to
expose the testator secret17. Nevertheless, enforcement ultimately introduces the risks of fraud
by promoting the use of secret trusts where such conditions are not satisfied. It would be
better to remain dependent on the formalities of Wills Act. As with fraud, enforcing the secret
trust would result in the creation of scenario that results in the possibility of unfairness or
unconscionable conduct.
Conclusion:
To summarize with, secret trust must be abolished. This is because neither the fraud
theory nor the will theory have the capacity of providing any form of constitutional
justification for permitting the enforcement of trust that fail to satisfy the formalities under
the Wills Act. Irrespective of the constitutional justification there are no good reasons that
justifies the enforcing of secret trust. In addition to this, the enforcement of secret trust in rise
of fraud risks. Ultimately, the ideal solution would be abolishing the secret trust and now it is
necessary to get rid of unjustified legal creation.
17 Morley, John. "The Common Law Corporation: The Power of the Trust in Anglo-American
Business History." Colum. L. (p.116). (2016): 2145.

9EQUITY AND TRUSTS LAW
References:
Bankman, Joseph, et al. “Federal Income Taxation”. (p. 380). Aspen Casebook, 2018.
Bridge, Michael. Personal property law. (p. 215). OUP Oxford, 2015.
Buenker, John D. The Income Tax and the Progressive Era. (p. 276). Routledge, 2018.
Clements, Richard, and Ademola Abass. “Complete Equity and Trusts: Text, Cases, and
Materials”. (p. 157). Oxford University Press, 2018.
Dal Pont, Gino Evan. "equity and trusts”: (p. 198). Commentary and Materials. (2018).
Fox-Decent, Evan. "The Constitution of Equity." The Philosophical Foundations of the Law
of Equity (p.236). (Oxford University Press, 2019 Forthcoming) (2019).
Hudson, Alastair. “Understanding equity & trusts”. (p. 181). Routledge, 2016.
Klinck, Dennis R. Conscience, Equity and the Court of Chancery in Early Modern England.
(p. 284) Routledge, 2016.
Martin, Jill E., and Harold Greville Hanbury. “Modern equity”. (p. 540). Sweet & Maxwell,
2015.
Morley, John. "The Common Law Corporation: The Power of the Trust in Anglo-American
Business History." Colum. L. (p.116). (2016): 2145.
Nair, Aruna. Claims to Traceable Proceeds: Law, Equity, and the Control of Assets. (p.169).
Oxford University Press, 2018.
Newton, Kenneth, Dietlind Stolle, and Sonja Zmerli. "Social and political trust." The Oxford
Handbook of “Social and Political Trust” (p. 37) 2018.

10EQUITY AND TRUSTS LAW
Pattenden, Rosemary, and Duncan Sheehan. The law of professional-client confidentiality. (p.
132). Oxford University Press, 2016.
Treves, Adrian, et al. "Predators and the public trust." Biological Reviews 92.1 (2017): (p.
248-270).
Virgo, Graham. “The Principles of Equity & Trusts”. (p. 156). Oxford University Press,
2018.
Watt, Gary. “Trusts and equity”. (p. 54). Oxford University Press, 2018.