MEMORANDUM From: (Associates) To: (Partner) Re: Betty Bennettâ€™s Trust Deed Date: January 09, 2013 I. INTRODUCTION The memorandum is prepared for the meeting with Betty Bennett, a client who intends to set up a trust for the welfare of her grandchildren. In the following analysis, each provision in the proposed trust deed is discussed in order to identify legal issues and problems which need to be solved or avoided.
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The relevant suggestions are provided, and other considerations which include questions and issues to be clarified are also given in the memorandum. II. ISSUES AND RECOMMENDED PROVISIONS 1. Provision 1 A valid express trust is required to satisfy the â€œthe three certaintiesâ€ which are the certainty of intention, certainty of subject-matter and certainty of objects. To establish a legally effective trust for Ms Bennett, it must be shown that the client has the intention to create a trust (but not a gift or loan), and immediately transfer the property when the trust is initially executed. It is very clear from the wording of â€œupon creation of the trustâ€ that the client has the intention to establish a trust but not a gift or loan. However, in the first provision of the drafted trust deed, it is uncertain when the trust deed will be created and when the $1 million will be transferred to the trust account. Additionally, the provision will be not legally enforceable to declare an intention to establish a trust for future time without considerations. Therefore, the provision is invalid and needs to be redrafted to change the wordings to make sure that the trust property is immediately transferred at the commencement of the trust deed. For the requirement of subject matter, the property transferred to the trust must be certain and identifiable. The property that the client intends to be held on trust is $1million. As the subject matter of the current trust is cash from Ms Bennettâ€™s personal property which is tangible, the property can be identified and defined. It can be suggested that the word â€œcashâ€ should be incorporated into the provision to avoid ambiguity. An express trust is established completely when the trust property is transferred to the trustees in the capacity of trustees. It is highly recommended to list the names of the trustees who are Cathy and Denis, and give the details of the specific trust account set up for the purpose of this particular trust in the provision. [Recommended provision]
|I, Betty Bennett, hereby assign $ 1 million in cash into the specific trust account in the name of the trustees, Cathy Chen and Denise Finkel,|
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