Equity Law &
Trusts
Andrew for Chapter 5
Agenda
Insert photo here +Introduction
+Laws & Natural Law Principles
+ What is Equity
Insert photo here
+The Foundation & Principles of Equity
+Understanding Equity
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Introduction
It is time we got serious about what we want from
our lives and take ownership of our destiny.
Whilst we have to unravel and make sense of the
deceptions of the World that we have been
brainwashed to believe and reconfigure our
brains.
We have new Truths that light us from within like
never before.
Unalienable Truths. Our Rights.
Truths that will guide us to the life we deserve.
Together we can achieve everything we desire.
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Laws & Natural Law
Principles
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Highest to the Lowest Law
Eternal Law
Et ernal law is t he mind of God which humans cannot know. Cont ained in it are t he laws which
Heirarchy
govern the universe and control t he life cycle of everyt hing in exist ence. Alt hough humans cannot
fully know t he et ernal law, they can occasionally glimpse reflect ions of it, for example through
scientific knowledge of aspect s of the nat ural world.
of Laws
(from The Sovereigns Project)
Divine Law
Divine law is the law of God revealed t o people t hrough t he Bible, which Christ ians call t he
“Word of God”. J esus Christ, t he Son of God, also brought Divine Law wit h him and t he
t eachings of Christ convey Divine Law t o t he people.
Natural Law
Everyone has a nat ural sense t hat “good is t o be done and evil is t o be avoided” which some call
human nat ure. It is what directs our conscience and if applied wit h reason to a situation will lead
t o t he right out come. Natural Law is unwrit t en and unspoken, it is just underst ood.
Universal Law
Universal law refers to a code of ethics that is agreed by all and universally accept ed. There has t o
be a vict im for universal Law t o be broken. I.e. Murder, t heft , fraud, assault . Universal Law is
unwrit t en and unspoken, it is just underst ood.
SOVEREIGNTY
Self-governed, having supreme authority
Human Law
These are everyday rules that govern our lives, and are priorit ised as follows:
Equity Law
Equity law and t he law of commerce deals with contract s at t he highest level, and are designed t o
prot ect the individual. These would include Trusts, Affidavits, Liens, Not ices and Torts.
Common Law
This is the foundation of English law which is derived from custom and judicial precedent rather 5
Natural Law Principles
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Introduction to Equity Law
Equity Law is a very deep subject as there are no
defined rules in comparison to Common Law
and Legislative Law.
I have only just scratched the surface of what we
need to know but my research shows that to
have a basic overstanding of Equity Law will help
set the foundation of Trusts as the two are
intrinsically linked.
From this we can then look at Creating our own
Trusts and Affidavits so we can protect ‘our
Equity’.
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What is Equity
• Equity Meaning: The Quality of being fair & just or impartial.
• In Law: (also called Chancery)
The application of dictates (state or order of authority) of conscience or the principles of natural justice to the
settlement of controversies
• Finance: The sum of your Assets once debts are paid off.
• Blacks Law Dictionary 4: In its broadest and most general signification, this term denotes the spirit and the habit of
fairness,
justness, and right dealing which would regulate the intercourse of men with men, the rule of doing to all others as we
desire them to do to us; or, as it is expressed by Justinian, "to live honestly, to harm nobody, to render to every man his due
It is therefore the synonym of natural right or justice. But in this sense its obligation is ethical rather than jural, and its
discussion belongs to the sphere of morals.
It is grounded in the precepts of the conscience, not in any sanction of positive law.
• The Origins of Equity is ‘Equality’ – (Evenness in an ethical context)
• Equity operates on the conscience of the owner of the legal interest.
(Conscience means: ‘knowledge with’ or ‘knowledge of oneself with oneself’) 8
The Foundations & Principles of Equity
•Equity is Primarily associated with Justice. Individual Justice.
(The Principles which have evolved under Common Law also aim for justice but these are attained through more
generalized legal standards).
•Equity corrects the Law. (in every legal system defects arise which cannot arise by a universal principle).
•Equity does not apply defined rules, it evaluates specific conduct which requires flexibility and discretion.
•This stems from ‘Good Faith, honesty & generosity’.
• St. Germain said: ‘ In some cases it is necessary to leave the Words of law and follow that which reason and justice
requires, and to that intent equity is ordained, to temper and mitigate the rigour of law.
(St Germain is a first century the Ascended Master who is the keeper of the Sacred Violet Flame of Healing. He is deeply concerned about humanity and a bringer of love to all).
• Equity does not apply defined rules, it evaluates specific conduct which requires flexibility and discretion which stems from
‘good faith, honesty & generosity’. Good faith and fair dealing.
• Equity will only assist those ‘with clean hands’ – The Quality of the plaintiffs conduct.
• Equity will never overrule or invalidate Common Law and will always, where possible, attempt to follow it.
• Equity follows the law and alleviates the deficiencies of Law, not overrules it.
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Understanding Equity
• Aristotle’s Ethics described equity in the following terms:
For equity, though superior to justice, is still just. Justice and equity coincide, and although both are good, equity is
superior
What causes the difficulty is the fact that equity is just, but not what is legally just: it is a rectification of legal justice.
• The explanation of this is that all law is universal, and there are some things about which it is not possible to pronounce
rightly in general terms;
• Equity exists to rectify what would otherwise be errors in the application of the law to factual situations in which the
judges who developed common law principles or the legislators who created statutes could not have intended.
• Equity is a means of preventing any unfairness which might otherwise result from the rigid application of formal legal rules.
• The code of rules which permits the courts to use their discretion in individual cases not to apply statute or common law
literally but rather to do what is ‘right’ between the parties irrespective of the law.
• the courts will intervene to stop a fraudster or wrongdoer from taking advantage of the rights of another person.
• Equity is therefore interfering to protect some underlying right of the victim because of a contract with the fraudster, or
because the fraudster has control over some property which is rightfully the victim’s, or because we can assume that the
actions of the fraudster will affect the victim in the future in some way.
• In any of these cases, equity will attempt to intervene to stop the shyster from acting unconscionably.
• It will then impose a remedy which both prevents the shyster’s wrongdoing and compensates the victim for any
consequential loss. 10
Trusts
+ Introduction
+ Definitions
+ What is a Trust
+ Types of Trusts
+ Creating a Trust
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Definitions
• Meaning of the word Trust:
• Origin: From the old Norse ‘traustr’ – make Strong and safe – rely on, as in: “ help, confidence, protection, support”
• Dictionary: Firm belief in the reliability, truth, or ability of someone or something.
• Acceptance of the truth of a statement without evidence or investigation
• The state of being responsible for someone or Something
• In Law: An arrangement whereby a person (a trustee) holds property as its nominal owner for the good of one
• or more beneficiaries.
• Blacks Law Dictionary 4:
• A right of property, real or personal, held by one party for the benefit of another, who is termed trustee, for the benefit of
another, who is called the cestui que trust, respecting property which is held by the trustee for the cestui que trust.
• (Cestui que trust. The Person for whose benefit a trust is created or who is to enjoy the income or the avails of it).
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Definitions
• Settlor (Creator ):
• The Creator of the Trust, (which once created has no further Legal rights over the property).
• Unless the Settlor specifically reserves contractual rights, he or she will have no further rights over the property once
transferred to the Trust.
• Trustee (Legal Title):
• Once the trust is properly created and the trustee is appointed, the trustee will be responsible for looking after the trust
property on behalf of the beneficiary. The Trustee has fiduciary (another name for trustee or Guardian) obligations towards
the beneficiary and must abide by these obligations. Only act in the best interest of the Beneficiary.
• The Trustee has no personal rights to the property.
• Beneficiary (the one who benefits):
• A beneficiary is the person or entity that you legally designate to receive the benefits from your financial products.
• The rights of the beneficiary will depend on the specific terms and nature of the trust.
• The beneficiary will always have a right to compel the trustees to carry out the terms of the trust.
• The beneficiary has proprietary (ownership) rights in the trust property. Thus, the beneficiary’s equitable interest is a right
in the property. That property right forms part of the beneficiary’s estate; 13
What is a Trust
Express Trust: (not as in fast but as in ‘to declare’, ‘an expression’)
A Trust is created when the absolute owner (settlor) passes the legal title in that property to a person (the trustee)
to hold that property on trust for the benefit of another person (the beneficiary) in accordance with the terms set
out by the settlor.
These are the three legal capacities to bear in mind when creating a trust.
The Settlor can also be the Beneficiary.
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Types of Trusts
• A revocable Trust: Also known as a Living Trust in which the terms of the trust can be changed at any time
• An irrevocable Trust: Describes a Trust that cannot be changed without the Beneficiaries consent.
• An Express Trust:
A Trust that is made by its maker (Settlor) rather than one that has been concluded by the law.
The term ‘expressing the trust’ means to personally (typically in writing) declare your office associated with the trust in order to avoid
additional presumptions used by courts, Agents (such as Clerk of the court)
There are three (3) certainties required for the creation of an Express Trust.
(1). The Settlor must demonstrate: A Clear intention to set up a Trust. This is known as ‘certainty of intention’
(2). Certainty of Subject Matter: The Trust property must be sufficiently segregated (set apart; isolated or divided).
This is known as ‘certainty of subject Matter’
Which means that the Trust Property must be registered with the Land Registry with the same names as the Settlor(s) and/or
beneficiaries of the trust. Unless the beneficiaries as the children or designates of the Settlor(s)
(3). The people to benefit from the Trust (Beneficiaries) must be identified with certainty. This is known as ‘certainty of objects’
To conclude:
For a Trust to be proven as intended the Settlor must make it certain who the Beneficiaries are, which property is to be held in Trust, who the
Trustees are and their responsibilities. All three (3) certainties must be satisfied, if not then the Trust is Void (in the eyes of the Law)
• Constructive Trust: One set up by a Court to conclude a dispute over Property or the breakdown of and Express Trust.
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Creating a Trust
Trusts can be set up so that the Trustees Fiduciary responsibilities are either:
(A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients' interests ahead of their own).
Fixed: Set terms are agreed so that the Trustees acts on to the terms of the Trust alone
Discretionary: The Trustee exercises their discretion and can carry out their power within the Trust to make decisions for the benefit of the Trust. (This
relates to the manner and how the property is distributed)
Personal Powers: The Trustee is Not subject to any fiduciary obligation or duties. (for example, does not have to make any payments to beneficiaries if not
considered necessary or in the best interest of the Trust. (Not beholden to the demands of a beneficiary)
However, if there was nobody entitled to bring the trustee before the court, (for suspected wrongdoing) by virtue of being a beneficiary then the court
would not be able to control the administration of the Trust. Though the conscience of the Trustee cannot be controlled by a court.
Fundamentals of the Law of Trusts:
The Trust imposes equitable obligations on the conscience of the trustee. The source of this is found in Equity. This is the case with all types of Trusts.
The Benefits and uses of Trusts:
Owning Property but not Owning property
Family Trusts make it easier to distribute an estate for the deceased Settlor.
Taxation of Trusts – Used of avoidance. If you have no ‘legal title’ on anything in trust (property, jewellery and other valuables) then you are not liable for
tax on any dividends generated.
Someone may wish to create a Trust for the benefit of the family.
W16
They could be the Settlor, Trustee and One of the beneficiaries. You cannot be sole Trustee and sole Beneficiary.
Creating a Trust
Trusts of the Land and of the home.
(in the eyes of the Law – Legal Acts to bring into consideration when creating a Trust)
In order for there to be a valid declaration of Trust , the declaration must comply with Section53 (1(b) of the Law of Property Act
1925.
Quote: “a declaration of trust respecting any land (property) or any interest therein must be manifested and proved by some writing
signed by some person who is able to declare such trust or by his will”.
Failure to comply with that formality will lead to a failure to create a valid express trust.
Trust of Land and Appointment of Trustees Act 1996 (TOLATA):
A beneficiary who is beneficially entitled to an interest in possession in land subject to a Trust of that Land is entitled, by reason of
his/hers interest to occupy the land at any time.
The Trustees are required to act reasonably to take into account ‘the intentions of the person(s) who created the Trust (Settlor) and
the purpose for which the land is held and the circumstances and wishes of the beneficiaries. Section 13(4)(a) & 13(4)(b)
A Trustee who is also a beneficiary could abuse his powers and exclude other persons who are also beneficiaries but not trustees. (so
if there are multiple beneficiaries they all should be trustees for fairness of the Trust)
If a conflict arose within the Trust then a breach of the trustee’s duty to act fairly would lead to a court ordering a conscionable
exercise of the power to make an order and thus create a constructive Trust controlled by the court, against the trustee.
Therefore, when creating a Trust there needs to be consideration where a ‘breach of trust’ may occur and any legal aspect resulting
from that breach (for example with a marriage / relationship breakdown) W17
Books that I have used for studying
Thank You 18
