Equity & Trusts: Secret Trusts
Exception to s9 Wills Act 1837
Normal requirements for testamentary gift or trust: s9 Wills
Act compliance ((1) in writing, signed by testator; (2) intention
through signature to give effect to will; (3) presence of 2 or more
witnesses; (4) witnesses attest).
Why use them?
Wills = public documents. Eg way to benefit someone/purpose you
wish to keep secret (eg mistresses, illegitimate children, political
parties).
Or if undecided re who to benefit.
OR to get around strictures of Wills Act: eg if want to change mind,
easier, don’t need to make new will.
Mechanism/definition
FST: outright gift in the will to intended trustees. Trust not
mentioned in will.
o Eg: will says £100,000 to Arthur’; Arthur has agreed to hold on
trust for B.
o On the face of it, looks like an absolute gift.
o If secret trusts fails: the trustee may may take the property
absolutely (as, on face of will, it’s an absolute gift).
HST: gift in will stated to be ‘on trust’ or equiv; but details kept
secret.
o Eg, will says: ‘£100,000 to Arthur to hold on the trusts I have
communicated to him’.
o Only firmly established/recognised in Blackwell v
Blackwell, HL (1929). 2 justifications for recognising HSTs:
(1) broader view of ‘fraud theory’, also applies to HSTs
(see below).
(2) Dehors the will theory.
Both cases: trustee is separately informed by the testator, inter
vivos, of the trusts.
Standard & burden of proof
Re Snowden: Burden on personal claiming the trust exists;
standard: balance of probabilities (civil standard).
Justification/rationale for enforcing secret trusts
‘Fraud theory’ (re FST)
o Maxim: equity will not permit a statute to be used as an
instrument for fraud. So can’t permit s9 Wills Act to be
used to commit a fraud (i.e. to defraud the intended
beneficiary).
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