Secret Trusts
1. Terminology:
a. Testator/testatrix = settlor
b. Legatee = Trustee
c. Beneficiary = Beneficiary
d. Residuary estate = the property comprising a deceased person’s estate after
payment of his/her debts, funeral expenses, cost of administration of the
estate and all specific bequests and devices
e. Residuary legatee = one that disposes of the whole testator’s personal
property after payment of debts and specific, demonstrative, and general
legacies
2. Historic Setting:
a. Secret trusts are mechanisms for making provision via a will for illegitimate
children or mistresses which avoids the publicity of describing the gift in the
will (e.g. Re Boyes, Blackwell v Blackwell)
b. But there are more secure and effective means of concealing the identity of B
by making lifetime gifts or creating lifetime trusts
c. Mostly, secret trusts are used to provide for B who has been forgotten and, in
some cases, because the testator was unsure as to who should be the
ultimate B when he made his will
3. Testamentary Trusts:
a. General Rule: Wills Act 1837, S. 9:
i. Writing
ii. Signed
iii. Witnessed
b. Limitation: Wills Act 1837, S. 15:
i. If a B named in a will witnessed the will, the gift will be void
ii. Exception: Bs under a secret trust did not lose their beneficial interest
entitlement by witnessing the will Re Young
1. Justification: “the whole theory of the formation of secret
trusts is that the Wills Act 1837 has nothing to do with the
matter… the forms required… are entirely disregarded”
Danckwerts J
2. i.e. secret trusts take place dehors the will
c. Exception: secret trusts
4. Secret Trusts:
a. Fully secret trusts:
i. It is not apparent on the face of the will that the property is given on
trust (Gardner, Introduction)
ii. On the face of the will there is an absolute gift on the legatee
iii. Trust and terms privately communicated
iv. Also arise where T inherits under the intestacy rules (which are rules
applied in the absence of a will) Re Gardner
b. Half secret trusts:
i. Disclosing that the legatee takes the property as trustee but
withholding the details of the trust (Gardner, Introduction)
1
, ii. Gift to legatee on trust in the will but no mention of the terms of trust
iii. Terms privately communicated
c. 3 Requirements for Validity – Ottaway, Brightman J:
i. Intention to create a trust
ii. Communication
iii. Acceptance of trust obligations
d. All 3 certainties must be met Kasperbauer, Gibson LJ
e. 3 Certainties – Knight:
i. Certainty of intention/words
ii. Certainty of subject-matter
iii. Certainty of objects
5. Fully Secret Trusts:
a. Intention:
i. Intend to impose a binding obligation, not merely moral
1. Re Snowden: my brother ‘would know what to do’
2. McCormick v Grogan: ‘I do not wish you to act strictly on the
foregoing instructions, but leave it entirely to your good
judgment to do as you think I would’
3. Distinction between ‘precatory’ and ‘imperative’ words Lambe
a. Precatory words: desire, wish, confidence, pleading
i. Lambe: ‘to be at her disposal in any ways she
may think best, for the benefit of herself and he
family’
ii. Re Adams and Kensington Vestry: ‘in full
confidence that she would do what is right’
iii. Re Diggles: ‘it is my desire that [my daughter]
allows Anne an annuity of £25 during her life’
b. Imperative words: must, shall, will
b. Communication:
i. Oral or in writing communication of intention
ii. Timing: can be before or after the execution of the will but must be
before the testator’s death Re Gardner
1. Before execution: assumption is that acceptance is clear, i.e.
created due to this reliance
2. After execution: assumption that testator would have
revoked/rewritten the will
iii. Re Boyes – communication of (3 points):
1. Fact of trust
2. Terms of trust
3. Property subject to the trust
4. Key Cases:
a. Re Boyes: verbally told of trust, letter of details never
for sent, letter found after testator’s death
i. Held: insufficient
b. Re Keen: sealed envelope with terms, opened after
testator’s death
2
1. Terminology:
a. Testator/testatrix = settlor
b. Legatee = Trustee
c. Beneficiary = Beneficiary
d. Residuary estate = the property comprising a deceased person’s estate after
payment of his/her debts, funeral expenses, cost of administration of the
estate and all specific bequests and devices
e. Residuary legatee = one that disposes of the whole testator’s personal
property after payment of debts and specific, demonstrative, and general
legacies
2. Historic Setting:
a. Secret trusts are mechanisms for making provision via a will for illegitimate
children or mistresses which avoids the publicity of describing the gift in the
will (e.g. Re Boyes, Blackwell v Blackwell)
b. But there are more secure and effective means of concealing the identity of B
by making lifetime gifts or creating lifetime trusts
c. Mostly, secret trusts are used to provide for B who has been forgotten and, in
some cases, because the testator was unsure as to who should be the
ultimate B when he made his will
3. Testamentary Trusts:
a. General Rule: Wills Act 1837, S. 9:
i. Writing
ii. Signed
iii. Witnessed
b. Limitation: Wills Act 1837, S. 15:
i. If a B named in a will witnessed the will, the gift will be void
ii. Exception: Bs under a secret trust did not lose their beneficial interest
entitlement by witnessing the will Re Young
1. Justification: “the whole theory of the formation of secret
trusts is that the Wills Act 1837 has nothing to do with the
matter… the forms required… are entirely disregarded”
Danckwerts J
2. i.e. secret trusts take place dehors the will
c. Exception: secret trusts
4. Secret Trusts:
a. Fully secret trusts:
i. It is not apparent on the face of the will that the property is given on
trust (Gardner, Introduction)
ii. On the face of the will there is an absolute gift on the legatee
iii. Trust and terms privately communicated
iv. Also arise where T inherits under the intestacy rules (which are rules
applied in the absence of a will) Re Gardner
b. Half secret trusts:
i. Disclosing that the legatee takes the property as trustee but
withholding the details of the trust (Gardner, Introduction)
1
, ii. Gift to legatee on trust in the will but no mention of the terms of trust
iii. Terms privately communicated
c. 3 Requirements for Validity – Ottaway, Brightman J:
i. Intention to create a trust
ii. Communication
iii. Acceptance of trust obligations
d. All 3 certainties must be met Kasperbauer, Gibson LJ
e. 3 Certainties – Knight:
i. Certainty of intention/words
ii. Certainty of subject-matter
iii. Certainty of objects
5. Fully Secret Trusts:
a. Intention:
i. Intend to impose a binding obligation, not merely moral
1. Re Snowden: my brother ‘would know what to do’
2. McCormick v Grogan: ‘I do not wish you to act strictly on the
foregoing instructions, but leave it entirely to your good
judgment to do as you think I would’
3. Distinction between ‘precatory’ and ‘imperative’ words Lambe
a. Precatory words: desire, wish, confidence, pleading
i. Lambe: ‘to be at her disposal in any ways she
may think best, for the benefit of herself and he
family’
ii. Re Adams and Kensington Vestry: ‘in full
confidence that she would do what is right’
iii. Re Diggles: ‘it is my desire that [my daughter]
allows Anne an annuity of £25 during her life’
b. Imperative words: must, shall, will
b. Communication:
i. Oral or in writing communication of intention
ii. Timing: can be before or after the execution of the will but must be
before the testator’s death Re Gardner
1. Before execution: assumption is that acceptance is clear, i.e.
created due to this reliance
2. After execution: assumption that testator would have
revoked/rewritten the will
iii. Re Boyes – communication of (3 points):
1. Fact of trust
2. Terms of trust
3. Property subject to the trust
4. Key Cases:
a. Re Boyes: verbally told of trust, letter of details never
for sent, letter found after testator’s death
i. Held: insufficient
b. Re Keen: sealed envelope with terms, opened after
testator’s death
2
