Secret trust

These usually arise where a person wishes to make provision for another but does not want the whole world to known about it. When a person dies his will become open to public inspection and secret trusts are used to  avoid this public scrutiny and sometimes this is because  the testator mistress or illegitimate children. The doctrine of secret trust was originally based on equity’s maxim that equity will not allow a statute to be used as a cloak or  engine of fraud. The statute referred to in this maxim was the Wills Act 1837, which was a statute of general application. Under section 9 of that act (equivalent to section 160) no will shall be valid unless
(a)          it is in writing and signed by testator or by some other person in his presence or by his direction
(b)          it appears that the testator intended b y his signature to give effect to the will
(c)          the signature is made or acknowledged by the testator in the presence of two or more witnesses
(d)          each witness either (1) attests and signs the will or (2) acknowledges his signature in the presence of the testator. A will executed without these formalities is void and this applies to both inequitable interest as well as a legal estate disposed of by the will.
The doctrine of secret trust applies in that the details of the trust or the very existence of the trust is not disclosed in the will. And the doctrine applies as follows: If a testator makes a provision of a gift in his will to a trustee therein named on the strength of a promise that the recipient will hold that property on trust for a third party, equity will prevent any attempt by the recipient to rely on the absence of any mention of the trust in the will and to claim the property for himself. And this is despite the testator’s failure to comply with section 9. an equitable obligation communicated to the trustee during the testator’s lifetime, which obligation which the trustee has expressly or by implication accepted. The doctrine of secret trust therefore operates outside the provisions of the will Act or the Law of Succession Act. In Blackwell v Blackwell (1929) AC 318, 335, it was stated by Viscount Summer “ For the prevention of fraud equity fastens on the  conscience of the legatee a trust which otherwise would be inoperative. In other words it makes him do what the will has nothing to do with. It lets him take what the will gives him and then makes him apply it as the court of conscience directs and it does so in order to give effect to the wishes of the testator which would not otherwise be effectual.”

The basis of the secret trust is therefore the existence of a validly executed will which passes the title of property to the intended trustee and the acceptance by the trustee of an equitable obligation during the testator’s lifetime
This is illustrated in the case of Re Young (1951). Ch 344.  Here one of the intended beneficiaries under a secret trust had witnessed the will and the question was whether he forfeited his legacy under section 15 of the Wills Act which provides that a witness to a will cannot take a benefit under it (S 13 (2) of the Law of Succession Act. The judge held that there was no forfeiture because the whole theory of the formation of a secret trust was that the act had nothing to with the matter. He went on to say that the forms required by the Wills Act were to be entirely disregarded because the beneficiary did not take by virtue of a gift in the will but by virtue of a secret trust imposed on an apparent beneficiary who did not take under the will and who was bounded by the trust.

Secret TRUSTS will classified into full and half secret trust.


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