Animal Trust? Whether animal can be the beneficiaries of a trust or not.

Actually, a gift for specific animal or animals may constitute a valid non-charitable trust. On the other hand, trust for animals generally could be charitable if we look in the case of Re Wedgewood [1915] 1 Ch 113, the court held that trust for animals generally could be charitable,  principally because they “tend to promote and encourage kindness…and …stimulate humane and generous sentiments I man towards the lower animals, and by this means…promote feelings of humanity and morality generally, repress brutality, and thus elevate human race”. Besides, a trust for the maintenance of animals generally may qualify as a charitable trust, but trusts for the maintenance of a specific animal or animals may be valid purposed trusts. Specific animals include a cat, dog or horse. Furthermore, if we look into the three cases of Re Doughlas (1887) 35 Ch D 472, Re Moss [1949] 1 All ER 495 & Re Murawski Will Trust [1971] 1 WLR 707, the followings trust have been held to be charitable: for a home lost dogs, for the welfare of cats, an for protection of animals from ill-usages, cruelty and suffering. In order to be valid, the trust must either lead to the relieving of suffering of animals or its must not restrict access to public to view the animals.

Meanwhile, in the case of Murdoch v AG (Tasmania) (1992) 1 Tas R 117, SC (Tas), Zeman J explained “…a gift for the benefit of animals is not charitable per se. Something more, by way of a benefit to the community, is required. If the object of the gift is to prevent cruelty t animals such a benefit of animals would readily be perceive…Certain things which might be done for the benefit of animals are of no benefit to the community and may even be contrary to the best interests of the community. It is not enough to say that some things done for the benefit of animals will be for the benefit of the community”.

Importance to says, in the case of Re Grove-Grady [1929] 1 Ch 557, which the decision of this case will not be followed today is about a gift to a society to provide refuge to animals and birds free from human molestation. The English Court of Appeal held that the trust failed as it was not in the public benefit.

So, from the above case especially in Murdoch v AG & Re Grove-Grady, we can see in per se. that the court had depress that the charitable trust for animals must gives or brings the public benefit to the society. But, we must notice that there are still in certain circumstances that the trust to animal or animals can be a valid trust.

So, like I said before, a gift for specific animal or animals may constitute a valid non-charitable trust, but on the other hand, trust for animals generally could be charitable because there still an exception we can found in non-charitable trust, the exception follow the Common Law and also has been accepted in Malaysia. So, in easy words  there are certain circumstances that the trust for the animal can be valid although it doesn’t give the benefit to the human. There are the maintenance of specific animals, tombs and monuments and trust for the purpose of Chinese ancestors pray. In the case of Pettingal v Pettingal (1842) 11 LJ Ch 176 , the court held the trust is a valid where the one of the trust includes the gift£50 per annum to maintain the testators’s  favourite black mare. Besides, a lot of cases like in for the upkeep of the testator’s horses in Milford v Reynold (1848) 16 Sim 105, specific cats in Re Haines (1952) The Times , November 7, and an annuity £750 for the upkeep of the testator’s horses and hounds for a period of 50 years in Re Dean (1889) 41 Ch D 552. The last case “has been accepted as authority are valid for the perpetuity period; and its believed that this exception to the general rule has been relied on countless cases since Re Dean...:>End.

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Certainty of Subject Matter & Object

Certainty of subject matter

A trustee must be able to identify precisely the trust property he is to hold on trust. Doubt as to the quantum may result in the trust failing to satisfy the requirement. In the case Palmer v Simmonds, the word "bulk" show the uncertainty on how much should the property be given to the beneficiary, the court held that it is not sufficiently certain for the purpose to create trust.
Meanwhile, in Sprange v Barnard, the court held that the remaining part was left and it is not sufficiently certain, thus the husband took beneficially. In the case Jackson v Hamilton, the word "reasonable income" can be said as a certainty of subject matter.

Certainty of the Object

-refers to whether the beneficiaries who will receive the benefit can be clearly ascertained.
In the case Morice v Bishop of Durham, it was stated every trust must have definite object. There must be somebody, in whose favour the court can decree performance.
- non-charitable purpose are invalid unless they fall into limited exceptions.

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Requirements of the Trust

Certainty 
3 certainty must be satisfied : ( based on the case Foreman v Hazard)
1. certainty of intention to create a trust
2. certainty of the subject matter
3. certainty of the object

Certainty of intention
- no particular words is required to created a trust (equity looks to intent rather that form)
- " a trust can be created by any language which is clear enough to show an intention to create it" (Halsbury's Law of Malaysia)
- the words used to convey the intention must be sufficiently expressive.
In the case of Quah Eng Hock v Ang Hoi Kiam, the court referred to the need for the words used to be clear & unequivocal & held that words indicating that the donor intended to divest himself
or herself of the beneficial interest woul be sufficient for the purpose.

In Comiskey v Bowring-Hanbury, majority House of Lords held that a trust had been created & on the death of the widow, the property would pass to the nieces as provided for in the will.
Besides, in the case Re Chianch Ke Hu, the expression " I direct my executorto distribute among such persons professing or practising the Budist religion..." was held that words were sufficiently imperative as to create a trust, although it failed as there was uncertainty in relation to the object.

To be continue..

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The distinction between Trust & Bailment

A bailment is to be distinguished from a trust in that it only confers possessory title to property, rather than proprietary right, upon a bailee. A bailment will not, in itself, create a trust. If the property is expressly conferred to a bailee for the benefit of third parties, then a trust in favour of the third parties may arise. However, the mere transfer of possession is, in itself sufficient. A bailment confers possession of property to a third party for certained  defined purposes.  Common Law will enforce a breach of the terms of the bailment specifically create a trust, no equitable relief will be available.

The distinction between trust & bailment is well evidenced in the dealings that a trustee & bailee may have with third parties. A trustee may pass the property on to an innocent third party purchaser. A bailee cannot pass any proprietary title on becouse a bailee only holds a possessary title. Furthermore, a bailment  can only arise with respect to personal property, whereas a trust can be created over real or personal property.    

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The distinction between Trust & Agency

The distinction between a trust relationship & an agency relationship lies in the fact that a trustee holds a vested property interest whereas the agent does not; an agent will usually only have possession of the property on behalf of his principal, rather actual title. An agent may (although not always) owe fiduciary obligations towards the principle, & so will have similarities with the trustee in this regards, although fiduciary obligations imposed in a trust relationship will generally will be more rigorous than those applicable to an agency relationship.

The distinction between the trust and agency also well highlighted through their dealings with third parties. an agent who deals with third parties will rarely be liable to those parties because she is acting on behalf the principal,  provide the dealing is within the scope of her powers. a trustee however, will always be liable to third parties for debts incurred in the course of running the trust unless she expressly exempts personal liability. Once the trustee pays out for expense associated with the proper management of the trust, she may be indemnified from the trust fund, or, if that is deficient, the beneficiaries personally.

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Terms associated with Trust

Cestui Que Trust- a beneficiary under a trust
 Beneficiary- 1. a person entitled to benefit from a trust. The beneficiary holds a beneficial interest in the property of which a trustee holds the legal interest. A beneficiary was known as cestui que trust.2. one who benefits from a will.
 Trustee-  a person having a nominal title to property that he holds for the benefit of one or more others, the beneficiary. Trustee may be individual or corporate bodies & can include such specialist as judicial trustee, custodian trustee, & the public trustee.
Settlor- a person who creates a settlement. In a broad sense the term includes testators, in a more restricted sense it signifies one who settles property during his life.
Settlement- a disposition of land or other property, made by deed, will, or very rarely by statue under which trust are created by the settlor designating the beneficiaries & the terms on which they are to take the property
Testator- a person who makes a will.
Testament- a will, strictly speaking, a testament is a will dealing only with the testator's personal property, not his land.
Testamentary trust- a trust contained a will.
Testamentary capacity- the ability to make a legally valid will. Person under 18 & mental patient do not have testamentary capacity.
Testate- having left, at one's death, a legally valid will.
Legacy- a gift of personal property effected by will.
Legatee- the person to whom the legacy is given.
Donor- given or gift.
Donee- the person take/accepted the gift.
Objects of a power- person in whose favour a power of appointment may be exercised, potential appointees.
Personal representative- a person entitled to deal with a deceased person's estate in accordance with his will or under the rules relating to intestacy. Eg : executors & administrators of all discriptions.
Intestacy- the state in which a person dies without having made a will disposing of all his property.
Will- a document by which a person (called testator) appoints executors to administer his estate after his death & directs the manner in which it is to be distributed to the beneficiaries he specifies. To be valid, the will must comply with the formal requirements of the will Acts.
Codicil- a document supplementary to a will, which is executed with the same formalities under the will Act, & adds to varies, or revoke provisions in the will. It must be proved with the will.
Deed- a written document that must make it clear on its face that it is intended to be a deed & validly executed as a deed.
Covenant- a promise contained in a deed & is binding even if not supported by considerations.
Trust instrument- a deed under which property is vested in trustees upon trust to apply it for the benefit of the beneficiaries specified in the deed.
Devise- 1. a gift by will of real property, the beneficiary is called devisee. 2. to dispose of real property by will.
Devisee- the beneficiary will of real property. 
Bequest- a gift by will of property other than land.
Bequeath- to dispose by will of property other than land.

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A comparison between A Trust & A Will

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Why do people set up trust ?

The reasons are :
(1)Assets held under Trust are not frozen upon demise.
(2)For the distribution of wealth, including periodical payment.
(3)To ensures the wealth is protected against lawsuits as well as creditors.
(4)The preservation of wealth.
(5)Fulfilling various personal objectives, including such as maintenance of dependents and education funds.

Examples of common usage of trust :

1) Distributing Wealth to Avoid Probate

Trust of this nature is useful when you have:

1. Minor children and spouse who is a homemaker or earning not as much as you
2. Special children requiring funds for medical, education and living expenses
3. Have a 2nd Family to provide for
4. Financing children’s tertiary education.

2) Protecting Wealth

Protecting Against Wasteful Beneficiaries

The Protector appointed will ensure there is no wastage of moneys receive under the Trust. Protector can stop disbursement of fund to undeserved beneficiaries.

Against Creditors of Settlor and Beneficiaries
Protector will instructs Trustee to stop the disbursement of fund whenany beneficiary has become a bankrupt.

Protecting Wealth Against the Settlor's Creditors
When a person becomes a bankrupt, usually an investigation by the authorities is done to recover assets transferred up to 5 years prior to bankruptcy. The suspicious transfers will be nullified to recover the assets to pay the creditors.


3) Protecting Wealth Against the Beneficiaries’ Creditors!

This is achieved by creating a Discretionary Trust when any of the beneficiary becomes bankrupt, he will no longer be entitled to the benefit under the Trust.

4) Preserving Wealth for Your Great Grandchildren
Preserving assets for your great grandchildren.

5) To cater funds for various family situations
For example, education and Maintenance fund for grandchildren, nephews etc

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General Principle about Trust

What is a Trust ?
A Trust is an estate planning instrument for an Individual to ensure the total protection of asset(s) is preserved for the beneficiaries while in the safe hands of the Trustee.
There are three parties involved in a Trust.
1. The settlor – person who sets up the Trust.
2. The Trustee – the person or a corporation who manage the Trust assets
3. The beneficiary – the person who receives benefits from the Trust

How does a Trust work?
The Trustee receives the assets from the Settlor and is legally obligated to hold and manage the assets for the enjoyment of the beneficiaries during the trust period set by the Settlor. It is commonly known as “Living Trust”

Who is the protector of the trust ?
A person appointed by the settlor with the following job scope:
1. Act as a watchdog for the settlor when he passed on
2. Advise the trustee on the needs of beneficiaries
3. Recommend payment to beneficiaries using Letter of Wishes
4. Has the power to remove and replace the Trustee.

To be continue..

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