Professional Documents
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Back to basics
Inter vivos Trust
A settlor who is living at the
time the trust is established
creates aninter vivostrust.
Testamentary
A trust created in an
individual'swillis called a
testamentary trust
Definition of a Trust
A Trust is an equitable obligation,
binding a person (e.g. a trustee)
to deal with property over which
he has control (e.g. the trust
property) for the benefit of
persons (e.g. the beneficiaries, of
whom the trustee may himself
be one), any one of whom may
enforce the obligation.
REQUIREMENTS
CERTAINTIE
S
FORMALITIE
S
CAPACITY
VALI
D
TRUS
T
Cont.
If there is no gift over in default of the
power of appointment, then there will be a
resulting trust in favour of the donors
estate.
Cont.
TRUST
The trustee is under a duty to act in accordance with
the terms of the trust deed and, should he fail to act,
any potential beneficiary may apply to the court and
force the trustee to act.
THE APPOINTMENT
OF TRUSTEES
INITIAL
Appointed by T/S;
Self declaration;
Nomination of
others;
Express provison;
SUBSEQUEN Statutory
T
provision;
Power of court;
INITIAL APPOINTMENT
General Rule:
Cont.
Re Lysaght [1965] 2 All ER 888 - where settlor
expressly states that no one else should be the
trustee apart from the one/s he had chosen.
Re Walker [1901] Ch. 259;
Re Tempest (1866) 1 Ch App 485;
Henderson v Henderson [1940] Ch 764;
Yusof bin Ahmad bin Talib & Ors v Hong Kong Bank
Trustee (Singapore) Ltd. & Ors [1989] 3 MLJ 84;
Subsequent
Appointments
Statutory in nature - S40 of TA 1949
S40(1)-
dead,
out of Msia for 12 months,
doesnt want to be trustee anymore,
refuse or unfit to act (incapable individuals eg mental
illness, old age and infirmity, bankruptcy
incapable of acting (corporations) refer S40(3)
minor
Appointment by Court
(Ct)
Under S45 TA 1949
Re Tempest
Ct to have regard to the wishes of the person by whom
the trust was created ie the beneficiaries
The ct will not appoint a person interested under the
trust, in opposition either to the wishes of the testator
or to the interest of the other cestuis que trust it is of
the essence of the duty of every trustee to hold an
even hand between the parties interested under a trust
Whether the appointment will promote or impede the
execution of the trust.
See also Bhikku Daeng v Maung Shwe Tyn [1980]
2 MLJ 184, FC
RETIREMENT OF
TRUSTEES
EXPRESS
PROVISION
STATUTORY
PROVISION
CONSENT
OF ALL
BENEFICIARI
ES
COURT
ORDER
REMOVAL OF
TRUSTEES
EXPRESS
PROVISIO
N
STATUTOR
Y
PROVISIO
N
COURT
INHERENT
POWER
Cont.
Test of Sir Owen Dixon
Cameron[1936] 54 CLR 572;
in
Miller
Cont.
Halsburys Laws of Malaysia:
The Court can remove a trustee if refuse to
execute a trust, mismanaged the trust or
disqualified himself by circumstances or conduct
from continuing to hold office also if detrimental to
the trust owing to his being out of sympathy with
its objects or his beneficiaries..
Cont.
However a trustee will not be removed against
his will on account of pecuniary embarrassment
which has ceased to exist and which does not
appear to have imperilled the interests of the
beneficiaries.
Death
Where there are 2 or more trustees, and death
occurs to one of them, then the remaining living
trustee may fulfil his obligations until another
trustee is appointed or the trustee can act solely
to fulfil the mission of the trust. s 23 (1)
In the case of a sole trustee, if he dies, then the
personal representatives can exercise the power
given to the sole trustee s 23(2) or choose to
appoint new trustees as they are not bound to
accept trusteeship as per s40(1) of TA.
DISCLAIMER
Disclaimer of
Trusteeship
BY DEED
BY ORAL
APPLICATION
INFERENCE BY
CONDUCT
No. of Trustees
See s39 of TA 1949- no
more than 4 persons, if
more than 4 named,
then first 4 names
should
act
as
the
trustees