Toughest Law Topics: Equity & Trusts (Part One) Current Affairs

Still feeling a bit uncertain about your three uncertainties? Good job it’s the next in line for our next free chapter from Sweet & Maxwell’s Nutshells revision series, then! This is the first Equity and Trusts topic we’ve got in store for you in our line up…enjoy!

According to your Facebook vote, The Three Uncertainties is one of the toughest topics in Equities and Trusts you’re craving for more on in your exam haze.  So, as promised, here you are!

The Three Certainties

Extracted from Nutshells Equity & Trusts


This chapter is concerned with the core ingredients of a valid trust which are often described as the three certainties. Each certainty will be examined in turn and the various principles, distinctions and requirements of each identified.

Due to the onerous duties placed upon a trustee, it is necessary that the settlor makes clear that a trust was intended, what property is subject to the trust and who the beneficiaries are in order that the trust can be enforced. Accordingly, the law has developed a test known as the ‘‘three certainties’’ that encompasses certainty of intention, certainty of subject matter and certainty of objects (Lord Langdale M.R. in Knight v Knight (1840)). Except as to charitable trusts which do not need certainty of objects (see below), the three certainties need to be present so that a trust can be workable and capable of supervision by the court.


It is necessary for the settlor to intend to create a trust as opposed to some other type of legal relationship. Nevertheless, there is no magic formula necessary to show the intention to create a trust. Equity looks to the intent rather than to the form. Although desirable, the use of the word ‘‘trust’’ is not essential. Even if the term ‘‘trust’’ is employed, this is no guarantee that a trust will be discerned (Midland Bank v Wyatt (1995)). There is no general requirement that a trust be created or even evidenced in writing and a trust can even be inferred from the conduct of the parties and the surrounding circumstances.

Precatory Words

Precatory words are words merely of hope and desire, e.g. ‘‘in the hope that’’, ‘‘I would like that’’, ‘‘I desire that’’ and ‘‘I feel confident that’’. Although in the older cases precatory words were sometimes sufficient to create a trust, since the late nineteenth century this is no longer the case. The court is now looking for imperative words that impose a mandatory obligation on the trustee. A moral obligation is not enough (Sweeney v Coghill (1998)). If there is doubt, the burden lies on the claimant to establish the necessary intention on a balance of probabilities (Re Snowden (1979)).


Lambe v Eames (1871), Re Adams and the Kensington Vestry (1884) and Margulies v Margulies (1999).

In Lambe v Eames (1871), the testator gave his estate to his widow ‘‘to be at her disposal in any way she thinks best for the benefit of herself and her family’’. It was held that these were precatory words and did not create a trust.

In Re Adams and the Kensington Vestry (1884), the gift was made, ‘‘in full confidence that she will do what is right as to the disposal thereof between my children either in her lifetime or by will after her decease’’. These precatory words ensured that no trust was created.

In Margulies v Margulies (1999), a legacy of a residuary estate was left to one son and expressed to be in confidence that, ‘‘if in the interests of family harmony’’, he would make provision for his brother and sister. As the words used were precatory in nature, the son could keep the money for himself.

Anomalous cases

There are two decisions that, at first glance, seem to contradict the modern rule that precatory words will not create a trust.

Comiskey v Bowring-Hanbury (1905) where the House of Lords held, that in looking for certainty of words or intention one should construe the document as a whole. There a testamentary gift to the widow ‘‘in full confidence’’ that she leaves the property on her death to one or more of his nieces did not prevent the creation of a trust in favour of the nieces. This was because the settlor went on to make what is called a gift over in default of appointment.

The added words that proved crucial were, ‘‘in default of any disposition by her . . . I hereby direct that all my estate and property acquired by her under my will shall at her death be equally divided among my nieces’’. The imperative wording of the gift over imposed the mandatory obligation on the widow. She held the property on trust for herself for life and then in remainder for the nieces equally. This case should not, therefore, be cited as authority for saying that precatory words can constitute a trust;

Re Steele’s Will Trusts (1948) where a solicitor drafted a trust for his client that followed an outmoded precedent which featured precatory words. Although this may have worked in the past to create a trust, it should have failed for a lack of certainty of intention. Nevertheless, the court concluded that the deliberate use of the precedent (albeit itself defective) demonstrated the necessary intention. This is a maverick case that turns upon its own facts and is of dubious authority.

There’s a lot more to this chapter – too much for this page alone! So we’re bringing in the reinforcements: check out the Sweet & Maxwell site for the whole chapter in PDF format. Just the ticket.

(Oh, and there’s another dose of Equity and Trusts on the cards very soon! That nasty pastie of a subject, Resulting Trusts, is lurking around the corner….)

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