A fully secret trust is a trust which a court of equity imposes on a person who has obtained title to property obliging him to hold it for the benefit of the persons for whom or purposes for which he knew that it was given or allowed to pass to him.
What are the requirements of a valid fully secret trust?
For a secret trust to be enforceable, three conditions must be satisfied: (1) the property owner must disclose its terms fully to the “trustee”; (2) the “trustee” must accept, or at least acquiesce in the trust and agree to carry out its terms; and (3) the communication and acceptance must occur before the testator's
What is a semi secret trust?
A testator may also consider using a semi-secret trust. With a semi-secret trust, an individual creates a trust, usually in a will, but doesn't indicate the beneficiary's identity. For example, Jim leaves a gift for Bob to hold “in trust” but provides no other information in the will as to the terms.
Does a secret trust need to be in writing?
A secret trust can be fully secret in that the agreement between its creator and the “trustee” is entirely oral. This means that the gift to the trustee is valid, but the terms of the trust are not valid, since a will is valid only if it is in writing and executed and attested in accordance with statutory formalities.
What constitutes secret trust?
A secret trust arises when a testator makes a gift in a will to a donee, intending that the donee should receive the gift as trustee for an ultimate beneficiary or beneficiaries, under an express or implied agreement between the testator and the donee, made outside the will.
Are secret trusts valid?
The secret trust is not an express trust. It cannot be express. This means that the gift to the trustee is valid, but the terms of the trust are not valid, since a will is valid only if it is in writing and executed and attested in accordance with statutory formalities.
Can a trust be secret?
A secret trust can be fully secret in that the agreement between its creator and the “trustee” is entirely oral. Or it can be semi-secret if the gift to the “trustee” is expressed in some limited form such as, “on terms I have conveyed to him”. Semi-secret trusts have their own distinct rules.