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The main elements of a secret trust, by Eugene Duhovnikoff BA/LLB

The elements required to establish a fully secret trust are:

  1.  Intention;
  2. Communication; and
  3. Acquiescence.

 

The testator has to intend his or her absolute gift to be employed as he or she and not as the donee desires; he or she has to tell the proposed donee of this intention and, either by express promise or by the tacit promise, which is signified by acquiescence, the proposed donee has to encourage him or her to bequeath the money in the faith that his or her intentions will be carried out.[1]

These requirements are conjunctive. What has to be shown is that there was a communication to the devisee (or intestatee) of the deceased's intentions, and an acceptance by that person of the request that she hold the property on trust for the enumerated purposes or persons.

As to the intention, a binding obligation must be intended. What must be intended is a trust in the legal sense of that term, which signifies a positive obligation. The communication of that intention is an essential factor — if not the most essential — because otherwise the devisee can, completely reasonably, be heard to say: “I took the will to mean precisely what it says on its face”. But once the communication is established, acceptance, though of course a necessary element can, in an appropriate case, be spelled out of the silence of the devisee. The view evolved through the Chancery courts was that if any person has received a request of this nature that person would be bound to say something if she or he rejected the notion that she or he should not enjoy the property beneficially.

Secret trusts are said to be fully secret, or half secret. The former give us no hint of a trust on their face; the latter indicate a trust, but not its terms. There is authority for the proposition that half secret trusts of land will not be enforceable without written evidence.[2]

As to fully secret trusts, an English approach has recognised that such trust were enforceable “outside the will”.[3] The approach in United States, Canada and New Zealand, is dualistic: The Court first enquires as to the obligation the Court is asked to uphold; it then (and only then) makes a context specific evaluation of that remedy which will best support or advance that obligation. As to the kind of evidence which can be led to support the existence of a secret trust, what is required is a close traverse of the evidence and the quality of that evidence before a plaintiff can hope to successfully establish a secret trust.

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[1] Blackwell v Blackwell [1929] AC 318 at 334; Brown v Pourau [1995] 1 NZLR 352; Page v Page [2002] NZFLR 689.

[2] Re Baillie (1886) 2 TLR 660, 661.

[3] McCormick v Grogan (1869) LR 4 HL 82.

 

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This article contains general information about legal matters. The information is not advice, and should not be treated as such.

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Professional assistance You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.

 

Reeves/Duhovnikoff & Associates Ltd. 2017

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