Secret and Half-Secret Trusts

Once admitted to probate a Will becomes available for the public to view. So then how would a testator benefit a person by his Will while keeping this disposition concealed? Enter the “secret trust”.

A secret trust arises where a testator leaves property to a person (A) in his Will, but that person has accepted that he will actually hold this property on trust for another person (B). The trust is fully secret as no reference is made to it in the Will; on the Will it appears as a gift from the testator to A, and B is not referred to.

There are also “half-secret trusts”. A half-secret trust arises where a testator refers to the existence of the trust in his Will but does not define the terms of it. For example “I give [gift] to A on the trusts which I have communicated to him.

To be enforceable a half-secret trust must be described in the Will as having been communicated to the trustees prior to the execution of the Will or at the same time as the execution. It must also be proven that the trust was communicated to the trustees and that they accepted it. If the trust is not communicated to the trustee before the execution of the Will the trust will fail and the trustees hold the property for the residuary beneficiaries.

Fully secret trusts must be communicated to the trustee before the testator’s death, but not necessarily before the execution of the Will. If the trust is not communicated to the trustee in the testator’s lifetime the trust fails and the gift takes effect as an absolute gift to the would-be trustee.

 

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