A full secret trust

A full secret trust, which are completely concealed by the testator in his will. On the face of the will, the alleged trustee takes absolutely. If property is given by will to x absolutely and a communication is made to x by the testator during his lifetime that x is to hold the property on specified trusts and provided also that x accepts the trust, a fully secret TRUST which is enforceable at equity will come into being. In the case of Ottaway v Norman (1972) Ch 698 the judge stated the essential requirements of a secret trust as follow
1.      The intention of the testator to subject the primary donee to an obligation in favour of a secondary donee
2.      the communication of that intention to the primary donee
3.      The acceptance of that obligation by the primary donee either expressly or by acquiesce. Evidence oral or written is admissible to show the terms of a trust. And in the case of Ottaway it was stated that clear evidence is needed before court will assume that the testator did not means what he said but intended that the gift should be held by the beneficiary subject to a secret trust. He was also of the opinion that the standard of proof required to establish a secret trust was perhaps analogous to that which the court requires for the ratification of a written instrument. On the other hand in Re Snowden (1979) the vice chancellor conceded that the standard of proof for ratification was not the appropriate analogy. He thought that in the absence of fraud or the special circumstances the standard of proof of a secret trust was merely the ordinary civil standard of proof required to establish an ordinary trust. In this case the testator had left her residual estate to her brother who subsequently died leaving his estate to his only son. There was some evidence that the testatrix had said that the brother would know what to do and would deal with everything for  her but it was held that although there was some arrangement between the parties it amount only to a moral obligation which was not intended to be binding and accordingly the brother had taken the residual free from any secret trust and on his death it passed to his son absolutely

The doctrine of fully secret trust has a rather long history and its basis was established as long ago as 18th century. Thus in the case of Drakeford v Wilks (1737) the t. had bequeathed a bond to the plaintiff. She was thereafter induced to make a new will by which she bequeathed the same bond to a third party  on the strength of a promise by the third party that upon his death the bond would go to the plaintiff and it was held on those facts that the plaintiff could compel the performance of the trust


FULLY secret acts

  1. It is essential to show that the testator did in fact communicate the trust during his lifetime to the legatee and that the latter explicitly or impliedly accepted it. If the legatee only hears about the trust after the testator’s death the secret trust will fail and the legatee will take absolutely.
[Legatee-one who is named in a will to take personal property; one who has received a legacy or bequest; loosely, one to whom a devise of real property is given]

2.    The communication of the trust and its acceptance may take place either before or after the date of the Will provided that it takes place during the lifetime of the testator.

3.    If the fully secret trust is accepted by the trustee but the objects of the trust are not communicated during the lifetime of the testator the trust will not take effect but in such a situation the legatee will not take absolutely and there will be a resulting trust in favour of the testator’s estate or in favour of the residuary legatee if there is one.

In the case of Re Boyes (1884) 26 Ch D 531, the testator had made an absolute gift of property to his executor. The testator had previously told the executor that he wished him to hold the property according to directions which he would communicate by letter and the executor had agreed to this arrangement. However, these directions were not communicated by the testator but after his death two unwitnessed documents were found in which the testator stated that he wished a particular person to have the property and on those facts it was held that the secret trust failed and the executor held the property for the testator’s next of kin as there was no gift of residual.

4.    Communication and acceptance of the trust may be effected constructively and in that case in Re Boyes the judged expressed the view that a trust put in writing and placed in the trustee’s hands in a sealed envelope would constitute communication and acceptance at the date of delivery for that purpose. This view was accepted by the court of appeal in the case of Re Keen (1937) Ch 236 which was a case of half secret trust.

It is required that the property that forms the subject matter of the intended trust be certain which is a rule that applies generally in the law of trust.


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