Secret trust evolved as a response act to the Wills Act 1837 and was originally created to prevent fraud. As the House of Lords held that equity will not allow a statute to be used as an instrument of fraud by the secret trustee .
It is a concealed arrangement made between a testator and the trustee and is made to come into force after death. A justification for ST is the ‘dehors the will’ theory which means the trusts arise outside of the will - a inter vivos trust. Its purpose is to benefit another individual that hasn’t been written in the formal will. The testator will leave property to the trustee under the will with the understanding that they will hold the property as a gift for which they will then later on be expected to pas...
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...y to the real beneficiary. Therefore implying that regardless of Sam’s passing away, as Ken had obtained consent on her behalf, before the testator died, the trust will still proceed, and Joseph will obtain Dan’s residuary estate.
After establishing that this trust is a FST, one must again asses as to whether this trust fulfils all the requirements needed to become binding. Intention was established when Dan gave Ken the sealed envelope with the terms of the trust. Communication was proven when Ken and Dan had an oral conversation in regards to the terms of the trust, Communication was also proven as in Re Keen stated that envelope and letter stating the terms was seen as sufficient amount of communication. Finally acceptance was proven when Ken stated “you know you can rely on me”. Concluding that the FST is binding, and Joseph will indeed receive the trust.
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