Large Group + Reading 4
LG:
Dinasio's Mortis Causa (Death Bed Gift) (DMC) conditions:
- Contemplation of death, event may cots him his life, specific reason.
- Conditional of death,
- Donor parts with dominion, wave dominion
Donationes Mortis Causa (‘DMCs’)
Re Beaumont [1902] 1 Ch 889
Liftetime gift dont happen till death
No formalities needed
Contemplation of death.
King v Dubrey [2015] EWCA Civ 581
Was old but no signs of near death.
Davey v Bailey [2021] EWHC 445 (Ch)
No substitute provision, mirrored will. No near death for both one had cancer while
the other didn't, had heart attack.
Thompson v Mechan [1958] OR 357
afraid of flying, not valid enough, existed in their head. (has to be real)
Wilkes v Allington [1931] 2 Ch 104
Risk of cancer died of pneumonia still valid despite not dying of the cancer that
made him contemplate his death.
Conditional on Death:
revert back to donor if don't die
wording conditional on death
death has to occur
Death has to be related to the contemplation of death
The donor must part with dominion over the subject-matter of the gift:
give control over of the item
King v Dubrey - one of three things:
- Handing over item
- if not physical item handing over the paperwork/ evidence of ownership (e.g. safe
code or key)
- handing over the means of accessing the physical item or the paperwork evidence
Re Lillingston [1952] 2 All ER 184
multiple boxes
Sen v Headley [1991] Ch 425
gift of land but no deed but valid as given original paperwork
PRIVILEGED WILLS
Section Wills Act 1837
Provided always, that any soldier being in actual military service, or any mariner
or seaman being at sea, may dispose of his personal estate as he might have done
before the making of this Act.
Only soldiers, seamen and naval personnel are the only ones who apply.
Nominations doesn't follow rules of wills but only needs to abide pension rules:
dont need to satisfy section 9
Non-statutory
Lump sums under pension schemes and insurance policies
Statutory
Accounts in friendly, industrial and provident societies, National Savings Bank
Re Danish Bacon Co LTd
Incorporation another exception of section 9:
the document must be identified in the will and
it must be in existence when the will is made and
the will must refer to it as existing
In the Goods of Smart [1902] P 238
Fully Secret Trust:
Communication of the trust and its terms to the trustee
McCormick v Grogan (1869) LR 4 HL 82)
Trustee must accept
Moss v Cooper (1861) 1 J & H 352
The communication and acceptance must occur before the testator dies.
Half-secret trust
Communication and acceptance must occur before or at the time the testator executes
the will
Re Keen [1937] Ch 236
Communication must be consistent with the way it is described in the will.
Why are secret trusts enforced?
6.3.1 Equity will not allow statute to be used as an instrument of fraud
McCormick v Grogan
‘Dehors’ the will
Blackwell v Blackwell [1929] AC 318
Reading P1:
Secret trusts are a unique legal concept where a beneficiary of a gift (typically
through a will) agrees to use that gift in a specific way, even though the terms of
this arrangement are not disclosed in the will itself. The secrecy lies in the fact
that the trust's existence or its terms are not revealed in the will, not that no
one knows about it. Secret trusts are often used to provide for beneficiaries who
may have been overlooked or to avoid public disclosure of certain beneficiaries,
such as illegitimate children or mistresses.
Types of Secret Trusts
Fully Secret Trusts:
These occur when a testator leaves property to someone in their will, and that
person has agreed to hold the property in trust for a third party. Neither the
trust's existence nor the beneficiary's identity is disclosed in the will. For
example, if George leaves £50,000 to his friend Ian, who has agreed to give it to
George's first wife Henrietta, this creates a fully secret trust. The trust is only
secret in the sense that it is not mentioned in the will; it can be proven through
witnesses, letters, or emails.
Half-Secret Trusts:
In this case, the will indicates that the recipient of the bequest is to hold the
property as a trustee, but the beneficiary's identity is not disclosed. For
instance, if George leaves £50,000 to Ian "on trust" without naming Henrietta, this
creates a half-secret trust. The trust is "half-secret" because the will shows that
the property is subject to a trust, but the beneficiary remains undisclosed.
Secret Trusts Arising on Intestacy:
These can occur when someone dies without a will (intestate), and the person
entitled to the estate agrees to hold the property in trust for another. For
example, if Ian is entitled to a share of George's estate under intestacy rules and
agrees to hold it for Henrietta, a secret trust is created.
Requirements for Creating Secret Trusts
To create a valid secret trust (whether fully secret or half-secret), three
essential requirements must be met:
Intention: The testator must intend to create a trust.
Communication: The terms of the trust must be communicated to the intended trustee.
Acceptance: The trustee must accept the trust obligations.
While some cases suggest that the creation of a secret trust resembles a contract
between the testator and the trustee, it does not require the same level of
agreement as a legal contract. The key is that the trustee agrees to hold the
property for the intended beneficiary.
Example Case: Rawstron & Anor v Freud
In this case, the famous painter Lucian Freud left a significant portion of his
estate to two women, who had secretly agreed to distribute it to undisclosed
beneficiaries, including some of his children. The court had to determine whether
this was a fully secret or half-secret trust. The judge ruled that it was an
absolute gift to the two women, who were then free to carry out their promise to
Freud, as there was no evidence of a half-secret trust in the will.
Fully Secret Trusts: Requirements and Key Principles
Fully secret trusts arise when a testator leaves property to someone in their will,
and that person (the "primary donee") agrees to hold the property in trust for a
third party (the "secondary donee"). The trust is "fully secret" because neither
the trust's existence nor the beneficiary's identity is disclosed in the will. The
leading case on fully secret trusts is Ottaway v Norman, which established the
three essential requirements for creating a valid fully secret trust: intention,
communication, and acceptance.
1. Intention
The testator must intend to impose a mandatory obligation on the primary donee to
hold the property for the secondary donee. A mere moral obligation is insufficient.
Example: In Re Snowden, a testatrix left her estate to her brother, stating he
would "know what to do." The court held this created only a moral obligation, not a
trust.
2. Communication
The testator must communicate both the fact of the trust and its terms (including
the beneficiary's identity) to the primary donee during their lifetime.
Failure to Communicate Terms: In Re Boyes, the testator informed his solicitor of
the trust but did not communicate the terms before death. The court held no secret
trust was created, and the property was held on a resulting trust for the
testator’s next of kin.
Communication by Sealed Envelope: In Re Keen, communication via a sealed envelope
given during the testator’s lifetime was deemed sufficient.
Extent of Communication: In Re Cooper, only the amount communicated to the trustees
(£5,000) was subject to the trust, not the increased amount (£10,000) in a later
codicil.
3. Acceptance
The primary donee must accept the trust obligation, either expressly or by
acquiescence. Silence after communication can constitute acceptance.
Example: In Moss v Cooper, one trustee remained silent after communication, which
was held to amount to acceptance.
Half-Secret Trusts
Half-secret trusts differ from fully secret trusts in that the will indicates the
property is held on trust, but the beneficiary's identity is not disclosed. The
requirements for half-secret trusts are similar (intention, communication, and
acceptance), but there are key differences in the timing of communication:
Communication Before Execution of the Will: For half-secret trusts, communication
must occur before the will is executed. This rule, established in Blackwell v
Blackwell, has been criticized as illogical, as it differs from the rule for fully
secret trusts (where communication can occur anytime before death).
Consistency with the Will: Evidence of communication must be consistent with the
will. In Re Keen, prior communication via a sealed envelope was inadmissible
because the will anticipated communication after execution.
Burden of Proof
Traditionally, a high burden of proof was required to establish secret trusts, as
they were seen as a means to prevent fraud. However, modern cases (e.g., Re
Snowden) have lowered the standard to the ordinary civil standard of proof, unless
fraud is alleged.
Failure of Secret Trusts
Fully Secret Trusts: If the trust fails, the primary donee takes the property
absolutely unless they admit to holding it as a trustee, in which case it is held
on a resulting trust for the testator’s estate.
Half-Secret Trusts: If the trust fails, the property is held on a resulting trust
for the testator’s estate, as the will indicates the property was not meant to be
taken absolutely.
Death or Disclaimer of the Trustee
Predecease of the Trustee:
Fully Secret Trusts: The trust fails if the trustee predeceases the testator (Re
Maddock).
Half-Secret Trusts: The trust does not fail; the testator’s personal representative
acts as trustee.
Disclaimer After Death: The trust does not fail if the trustee disclaims after the
testator’s death, as the trust is already constituted.
Can a Secret Trustee Benefit?
In fully secret trusts, the trustee may retain surplus trust property after
fulfilling the trust (Irvine v Sullivan).
In half-secret trusts, the trustee cannot benefit from surplus property, as the
will indicates all property is held on trust (Re Rees’ Will Trusts). This
distinction has been criticized as illogical.
Reading P2:
Privileged Wills
Privileged wills are a special category of wills that do not need to comply with
the formal requirements of the Wills Act 1837. These wills can be made orally or in
writing and do not require witnesses. The privilege is granted to three categories
of individuals:
Soldiers in actual military service.
Mariners or seamen at sea.
Members of the Royal Navy or Marine Forces in actual military service.
Why the Privilege?
The privilege dates back to the Statute of Frauds 1677, which exempted soldiers and
seamen from formal will-making requirements due to their unique circumstances. The
rationale is that these individuals are often removed from civilian life and may
not have the opportunity or resources to make a formal will. The privilege was
confirmed by the Wills Act 1837 and extended to include real property.
Should the Privilege Be Retained?
The privilege has been criticized as anachronistic, given that modern soldiers and
seamen are more literate and have better access to legal advice. However, the Law
Reform Committee recommended its retention, as there are still scenarios (e.g.,
peacekeeping missions or sudden military operations) where the privilege may be
necessary. The Ministry of Defence also supports its retention.
Types of Privileged Wills
1. Soldiers in Actual Military Service
Soldier: Includes not only combatants but also doctors, nurses, and chaplains
serving with the forces. Civilians working with the military may also qualify.
Actual Military Service: The testator must be in active service at the time of
making the will. This includes being on duty in a war zone, preparing for
deployment, or engaged in peacekeeping operations. The courts have interpreted this
broadly, even including soldiers on leave or in training.
2. Mariners or Seamen at Sea
Mariner or Seaman: Includes members of the merchant navy, Royal Navy, and even
civilian employees on ships (e.g., barmen, typists).
At Sea: Interpreted broadly to include rivers, lakes, and canals. A seaman can be
considered "at sea" even if on shore leave, provided they are preparing for a
voyage.
3. Royal Naval Personnel in Actual Military Service
Members of the Royal Navy or Marine Forces can make privileged wills even if not at
sea, provided they are in circumstances equivalent to soldiers in actual military
service.
Formalities of Privileged Wills
No Formal Requirements: Privileged wills can be made orally or in writing and do
not require witnesses.
Revocation: A privileged will can be revoked by marriage, a subsequent will, or an
informal writing expressing an intention to revoke.
Minors: Soldiers and seamen under 18 can make privileged wills, unlike ordinary
wills, which require the testator to be at least 18.
Statutory Wills
Statutory wills are made on behalf of individuals who lack mental capacity under
the Mental Capacity Act 2005. The Court of Protection can authorize the creation of
a will for such individuals, ensuring it reflects their best interests. The will
must be executed by an authorized person and witnessed, but the court has broad
discretion to determine what is in the individual's best interests.
International Wills
The Washington Convention 1973 introduced the concept of an international will,
which is valid in any country that has ratified the convention. The UK incorporated
this into law via the Administration of Justice Act 1982, but it has not yet been
brought into force. An international will requires an authorized person (e.g., a
solicitor or notary) to oversee its execution and issue a certificate of validity.
Nominations
Nominations are written directions to transfer funds or investments to a nominee
upon the nominator's death. They are often used in pension schemes or life
insurance policies.
1. Statutory Nominations
Maximum Limit: £5,000.
Formalities: Must be in writing and comply with the rules of the relevant fund-
holder.
Revocation: Revoked by marriage but not by a subsequent will.
2. Non-Statutory Nominations
Commonly used in pension schemes and life insurance policies.
The nomination is not binding on trustees but is usually followed.
Unlike statutory nominations, they are not revoked by marriage.
Donatio Mortis Causa (Deathbed Gifts)
A donatio mortis causa is a gift made in contemplation of impending death, which
takes effect only upon the donor's death. It is a hybrid between an inter vivos
gift and a testamentary gift.
Requirements:
Contemplation of Death: The donor must be contemplating death in the near future,
not just at some distant time.
Conditional on Death: The gift must be intended to take effect only if the donor
dies.
Delivery of the Subject-Matter: The donor must deliver the property or the means of
controlling it (e.g., keys, title deeds) to the donee.
Effect:
The gift is revocable until the donor's death.
If the donor recovers, the gift is automatically revoked.
The gift is not subject to probate and takes effect immediately upon death.
Criticism:
The doctrine is seen as a circumvention of the Wills Act 1837.
There is a risk of fraud or misinterpretation, especially in emotionally charged
situations.
The Law Commission has considered whether to retain or abolish the doctrine, but no
definitive decision has been made.
