the elements of three certainties have been declared in the case Of KNIGHT v KNIGHT. Where Lord Langdale said ''a trust will Only come into existence if there is certainty of words, certainty of subject Matter and subject of objects. Trusts in modern law are used as a measure of Protecting a family or to establish ownership of properties within family Agreements that could arise after a person's death or within their Lifetime.
Certainty of Intention
from cases such as Lamb v Evans, Comiskey v Bowring and Paul V Constance it's clear that an outright gift is presumed unless a Trust was clearly intended. In Re Hamilton Lindley LJ, said That the courts must look at all the words used by the testator to see if the True construction in context of the particular transfer was actually intended. This requires you to look at case by case, because in some cases words that have Been used previously might have been acceptable oppose to the words used now Might not be acceptable for a trust. Therefore making it clear that there is no Definite rules for determining whether words or dispositions have created a gift Or a trust. The test for certainty is subjective; it asks what the actual Intention of the testator were, looking at the words as a whole, rather than Focusing on particular words. However, certainty of intention must be Established for a trust to be created. If the trust cannot be established, then It will be a resulting trust which mean that it will be returned to the Testator.
Certainty of Subject Matter
the property to be held on trust must be capable of adequate Identification and the testator must hold the title at the time of making the Will. For there to be certainty of subject matter, the trust property must be Clearly identified. Where there is uncertainty of subject matter the decision Concerning certainty of intention can be affected. Lack of certainty of subject Matter will occur if the property which is supposed to be managed or Administered by the trustees on behalf of the beneficiaries cannot be determined As in Re London Wine. If the Certainty of subject matter is Missing then there are two possible outcomes that can happen. The first outcome Is that the gift will go absolutely to the first donee as seen In Sprange v Bernard and this means the property is an absolute Gift to the person who should be a trustee, and will not go to the person Originally intended for. The second outcome can arise if the subject matter is Missing, the gift will fail and will revert back on a resulting trust to the Settlor's estate. In the case of chattels if the specific property is not Identified then a trust will not be created, this was held in the case Of Palmer v Simmonds. This case in which the word 'Bulk' was Not allowed to represent the amount of property left, because the word is to Broad to define how much the bulk of an estate is. There can also be problems Identifying how the property is divided between the beneficiaries as in the case Of Re Golays ''a reasonable income'' deemed to be objectively Defineable, so sufficiently certain. The trust property must be identifiable, Where the trust propery is selected from property that Is not changeable (i.E items that are unique e.G 5 out of 10 Individual paintings), it must be possible to identify that specific property as Intended in Re London Wine. However, if the property Involved is interchangeable (e.G 20 out of 100 shares of the Same type) the subject matter will be sufficiently certain which is identified In the case of Hunter v Moss.
Certainty of Objects
This third certainty makes it clear that the trust has To specify who the beneficiaries actually is, this is said by Lord Dennining in Re Vandervells Trust no2 and if the beneficiary is not Clear then the trust would be void for uncertainty of objects and the property That would have gone on trust would go back to the donor. Depending on the type Of trust, there are different rules for certainty of objects. In a fixed trust, The trust instrument sets out the the shares of each beneficiary in the trust Property, so that each beneficiary's interest is fixed. In order for a trustee To distribute the trust they must be able, under IRC Broadway v Cottages, to draw up a comprehensive list of everyone beneficially Entitled. The test used for certainty of objects show that you must be Able to identify the beneficiaries. It doesnt matter where they are, or even if Its known where they are, they just need to be identified. Whereas a Discretionary trust is where the settlor has designated a class of people from Which beneficiaries may be chosen, but the actual selection is made by the Trustees. The case of Mc Phail v Doulton made the courts Examine in detail the approach there were previously taking, as the HOL looked At the test of certainty of objects for powers becasue it was more generous than The test of certaint of trusts. It was often the case that an arrangement would Be valid if characterisd as a power by invalid if it was a trust. After Examining this case they adopted an 'any given posultant test' Which derived from the ruled on power in the case of Re Gulbenkian in this case it was said ''power is valid if it can be Said with certainty whether any given individual is or is not a member of the Class and does not fail simply because it's impossible to asscertain every Member of the class'' in the later case of Re Baden Deed Trust No2 the COA evaluated the test and distinguished between the conceptual And evidential certainty. In respect to a trust being unsuccessful for Uncertainty it will be held that the trustee cannot take possession of the Property and it will simply be held on resulting trust.