In the case of Bowack & Anor v Saxton, the judge determined that a valid trust had been created despite some of the paperwork, intended to create the trust, having not been completed.
The settlors had intended to transfer two investment bonds into trust and appoint themselves, and their daughter as trustees. The life company issued deed that they used effectively served a dual purpose; assignment of the investment bonds by the settlors to the trustees and creation of the trust. The issuing of the bonds and their assignment into trust to all take effect at or about the same time.
The off-the-peg paperwork issued by the life company was not fully completed; there was no date indicated as to the creation date of the trust, the trust property not was clearly identified (the policy numbers were not written in the available space on the form) and the additional trustee’s signature (the settlors’ daughter) was not witnessed, although the settlor’s signatures had been witnessed.
It is useful to note that a valid trust does not have to be evidenced in writing, by deed or other document, and can in fact come into existence orally or by the actions of the settlor(s) or by the operation of the law.
The judge held that as the settlors had signed the deed and their signatures had been witnessed, they had created the trust and the trust property was clearly identifiable as the investment bonds, those bonds having been validly assigned to the trustees. The date of the trust creation being when they were issued.
So not getting all the paperwork completed isn’t the end of the world then? Well not if the client doesn’t mind incurring the costs associated with taking proceedings to the High Court!
FOR MORE INFORMATION