EQUITY & TRUSTS
EQUITY & TRUSTS CORE SERIES
WHAT ARE EQUITY AND TRUSTS?
Equity represents one of the two main ramifications of the UK law system. On one side, there is Common law, such as the law made by the judges in the Common Law courts. On the other side, there is Equity, the law made by the judges in the Chancery courts. A clear understanding of the origins of Equity is essential in order to comprehend the principles on which today’s law is based, and it is based and the way those are applied.
A trust is an equitable device created by Equity in order to transfer property under the control of a trustee for the benefit of a beneficiary. Concepts such as ‘trust’ must be illustrated in light of the historical development of the subject.
STUDYING EQUITY AND TRUSTS
Equity & Trusts is one of the seven core subjects that the Law Society and the Bar Council deem essential in a qualifying law degree. Therefore, it is vital that a student successfully pass this subject to become a lawyer. Additionally, knowledge and understanding of the principles in these areas are needed in order to study other law subjects such as land, probate and Wills.
THE NATURE OF THE BENEFICIARY’S RIGHTS
Personal and proprietary interests: For example, the simplest type of trust is a bare trust, where there is one beneficiary. Here the trustee's function is to look after the trust property until it is ready to be transferred to the beneficiary in accordance with the trust instrument. In this type of case, the nature of the beneficiaries’ interest is one which is a form of ownership of the trust property. The beneficiary is said to have a propriety interest in the trust property.
General Principle: The beneficiaries’ interest is one which is a form of ownership of the trust property.
Vadim Schmidt v Rosewood Trust  2 AC 709
Facts: The settlor established two trusts in the Isle of Man with an Isle of Man with a professional company acting as trustee. The settlor was a Mr Schmidt, a rich Russian millionaire. He had founded two separate trusts in 1992 and 1995 with co-settlors who were also directors of Russia's largest and one of the world's largest oil firms. Mr Schmidt had delegated a substantial amount of authority to the Rosewood Trust Company. He attempted to hide the money in the trust, and he had not nominated a beneficiary. He wanted his son to take benefit from the trust eventually.
Mr Schmidt had given the trustees the power to appoint the son as sole beneficiary when the conditions were right, at some later time. The settlor died unexpectedly and intestate. The applicant (the son) sought access in both his personal capacity as heir to the settlor and in his capacity as executor of the settlor's estate to documents in possession of the trustee. The Court was unable to determine the proper construction of the gifts contained in the trust documents and hence was unable to determine whether the applicant had a proprietary interest in the trust property such as to entitle him to access the documents sought on the basis of the rule in O'Rourke v Darbishire  AC 581.
Ratio: the court held that persons with a non-proprietary interest in a trust, such as the object of a trust power, may now seek access to trust documents, with such access now to be treated as a discretionary question for the court in the exercise of its inherent jurisdiction to supervise the administration of trusts.
Application: The Privy Council reformulated the basis upon which a person interested in a trust may seek access to trust documents; abandoning the rule previously thought to have been established in O'Rourke v Darbishire  AC 581 that access is available to persons with a “proprietary interest” in the trust property.
EQUITY AND TRUSTS LAW TUTORING
Our Equity and Trusts Law tutors are experienced lecturers who have been called to the bar. We have collaborated and created a book for our students that serves as a complete source of fundamental information and aims to provide law students with a thorough comprehension of this subject. Our Equity and Trusts book is available for law students to buy now via the Amazon platform.
Equity And Trust Law FAQs
What connection exists between equity and trust?
Equity recognises the trustee's common law ownership but obliges them to use it for the beneficiary's advantage. Estates and property interests recognised under common law are likewise recognised under
Can a trust have equity?
The capacity to invest in various shares listed on a stock exchange is provided by equity trusts, also referred to as share trusts. Equity trusts often seek to offer both long-term growth and income.