Analyze the necessary conditions for the creation of valid secret trusts and explain the differences between fully and half Secret trusts.






Secret Trust

An equitable obligation disclosed to the intended trustee during the testator's lifetime is known as a secret trust. A gift that arises from the testator's will, or at least something that appears to be a gift, will be accompanied by trust.

 

Secret trust types

TWO TYPES OF SECRET TRUST EXIST:

1. FULLY SECRET TRUST

An obligation that is totally concealed on the face of the will is known as a fully secret trust. The property is given to the legatee without any mention of trust in the will, and the legatee is notified of the obligation during the testator's lifetime.

A gift like "I give the amount of £10,000 to A totally" is an example of a fully secret trust and how it can appear in the will itself. This appears to be a straightforward financial bequest to A to anyone reading the will. Actually, the testator before his death requested that A retain this amount on trust for B.

 

2. A HALF-SECRET TRUST

When a trust is mentioned or acknowledged in a will, but its terms are kept from the testator's will, the trust is said to be partially secret. The property will subsequently be transferred to the trustee in accordance with the provisions of the trust that were explained to them during the testator's lifetime.

One illustration of a semi-secret trust is In a will this may look like this: 'I give the sum of £1 million to A to retain on trust for the purposes stated to him'. This time, it is obvious that A is not the recipient of the money and that a trust exists, but the genuine beneficiary and the details of the trust are still unknown to someone reading the will.

 

 

A comparison of fully and half-secret trusts

Fully secret trusts are uncomfortable since there is no way to confirm that they exist or to learn the specifics of their terms. For a secret trust to be deemed legitimate, several requirements must be met, including the establishment of a purpose, the revelation of this intention to the trustee, and the trustee's acceptance of his responsibilities. 

• The trustee must be made aware of the secret trust's existence and its regulations as the second requirement. This can be done after the will has been prepared if done before to passing away; otherwise, the concealed trust is void and unenforceable.

• In Re Boyes, Kay J determined that it cannot be conducted after death since communication requires permitting the trustee to resign from his position.

 

On the other hand, In a half-secret trust, the will's beneficiary only acts as trustee; the trust's extra terms are not included on the face of the will.

• In the case of Blackwell v. Blackwell, the testator gave five trustees a variety of assets and gave them (in the will) instructions on how to keep the assets safe.

 

Between half-secret and fully secret trusts, there is a crucial difference.

The sharing of the trust's terms is the key difference between trusts that are half-secret and fully secret. Unlike completely secret trusts, which may take effect after the will as long as it does so before the testator's death, communication must occur at or before the will is executed. In Blackwell, Viscount Sumner made the following statement: "The testator cannot reserve to himself the power of making future unwitnessed dispositions by just appointing a trustee and allowing the objects of the trust to be provided later." This statement has come to be recognised as the "cornerstone" of the "prior acceptance rule".