SQE1 Trusts

Trusts Law · Certainty of intention

Walter's will leaves his residuary estate to his widow Edith 'absolutely, in the full confidence that she will make such provision for our children as she thinks right'. Edith takes the estate and gives nothing to the children. The children's solicitor asks whether Walter created a trust of the estate for them. The will contains no other relevant words. Which of the following is the best analysis?

1. No trust arose, because the words are precatory and show only a hope, not an intention to impose a binding obligation on Edith.
2. A trust arose, because 'confidence' is the word that creates a trust in a will.
3. A trust arose, because the children are Walter's natural beneficiaries.
4. A trust arose, because the word 'absolutely' is followed by words of obligation.
5. No trust arose, because a will cannot create a trust of residue.

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Answer: A. A trust requires three certainties: intention, subject matter and objects (Knight v Knight). The settlor must intend to impose a binding obligation, but need not use the word 'trust'. Courts no longer treat words such as 'in full confidence' as creating a trust. They look at the whole document and the surrounding circumstances (Re Adams and the Kensington Vestry). Walter gave the estate to Edith absolutely and expressed only a hope about the children. That is a precatory expression and does not show intention to create a trust. The tempting wrong answer is that 'confidence' creates a trust. That was the old approach, which the courts have abandoned.

Re Adams and the Kensington Vestry (1884) 27 Ch D 394; Knight v Knight (1840) 3 Beav 148

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Trusts Law · Certainty of subject matter

Gloria writes to her niece Lisa: 'I hold the bulk of the money in my savings account on trust for you.' The account holds about 90,000 pounds. Gloria never says what proportion 'the bulk' means. Gloria later dies and her executors refuse to pay Lisa anything. Lisa's solicitor asks whether the trust is valid. Which of the following is correct?

1. The trust is valid, because the account is identified and Lisa is certain.
2. The trust is valid for 51 per cent of the account, because 'the bulk' means more than half.
3. The trust is valid, but the court will fix the share that is fair.
4. The trust fails for uncertainty of subject matter, because 'the bulk' does not identify what Lisa is to receive.
5. The trust fails for want of writing, because savings must be settled by deed.

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Answer: D. For a valid express trust, the settlor must show certainty of intention, of subject matter and of objects. The trust property, and the interest each beneficiary takes, must be certain. In Palmer v Simmonds, a gift of 'the bulk' of the residue was void for uncertainty. Gloria's gift of 'the bulk' of her savings leaves it unclear how much Lisa is to take, so the trust fails and the money stays with Gloria's estate. The tempting wrong answer is that the trust is valid because Lisa and the account are clear. Both are clear, but the beneficial interest is not.

Palmer v Simmonds (1854) 2 Drew 221; Knight v Knight (1840) 3 Beav 148

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Trusts Law · Certainty of objects: discretionary trusts

The trustees of a fund hold 400,000 pounds on discretionary trust 'for such of the employees and former employees of Harlow Engineering Ltd and their dependants as the trustees think fit'. The company has several hundred current and former staff, and the trustees cannot produce a complete list of everyone who qualifies. A former employee asks whether the trust is void for uncertainty of objects. Which of the following is correct?

1. The trust is void unless the trustees can draw up a complete list of every possible object.
2. The trust is valid if the trustees can say of any given person whether or not that person is within the class.
3. The trust is void, because a class including dependants is too large to be certain.
4. The trust is void unless the court first appoints one beneficiary with an absolute right.
5. The trust is valid only if the trustees can show that each person's share is equal.

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Answer: B. For a fixed trust, all the beneficiaries must be ascertainable (the 'complete list' test; IRC v Broadway Cottages). For a discretionary trust, the test is whether it can be said with certainty of any given person that they are or are not a member of the class (McPhail v Doulton; Re Baden's Deed Trusts (No 2)). The class of employees, former employees and dependants is conceptually clear, and a court could decide on evidence. A class is void for administrative unworkability only if it is so hopelessly wide as to be incapable of forming a class. The tempting wrong answer is the complete list test. It belongs to fixed trusts.

McPhail v Doulton [1971] AC 424; Re Baden's Deed Trusts (No 2) [1973] Ch 9

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Trusts Law · Non-charitable purpose trusts

Edmund's will leaves 100,000 pounds to trustees on trust 'to promote friendship between the Carver family and the Dunn family'. The two families, who live in different towns, have about 70 living members between them. The trustees are willing to act. The Carver family's solicitor asks whether the trust is valid. Which of the following is correct?

1. The trust is valid, because the trustees are willing to carry out the purpose.
2. The trust is valid, because promoting friendship is a charitable purpose.
3. The trust is valid for 21 years, because purpose trusts are always allowed for that time.
4. The trust is valid, because it is a gift to the 70 family members, who can each sue.
5. The trust is void, because it is a non-charitable purpose trust with no beneficiary who can enforce it.

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Answer: E. A trust must have a beneficiary who can enforce it against the trustees (Morice v Bishop of Durham). A trust for a non-charitable purpose is void, apart from recognised anomalous exceptions such as trusts for particular animals, graves or tombs (Re Endacott). Promoting friendship between two families is not charitable, because it is private and not for public benefit. It is also not a trust for the family members themselves (contrast Re Denley), as the purpose is the object and any benefit to the family members is too indirect and intangible. The tempting wrong answer is that willing trustees save it. Trustees cannot supply a missing beneficiary.

Morice v Bishop of Durham (1804) 9 Ves 399; Re Endacott [1960] Ch 232

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Trusts Law · Formalities: declaration of trust of land

In March 2024, Hugh said to his daughter Ivy in the kitchen, in front of her partner, 'I am holding the house for you from now on; it's yours really.' Hugh continued to live in the house and nothing was written down or signed. Hugh has now died. His other children say Ivy has no interest. Ivy's solicitor looks for any later document. Which of the following best states the position?

1. The declaration is valid and enforceable, because trusts need no formalities.
2. The declaration is void, and no later writing can cure it.
3. The declaration of a trust of land is unenforceable unless there is signed writing evidencing it, though writing created later may suffice.
4. The declaration is valid only if it was made by deed in the presence of a witness.
5. The declaration is enforceable because Ivy has lived near the house for years.

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Answer: C. A declaration of trust of land must be manifested and proved by some writing signed by the person able to declare the trust (LPA 1925, s 53(1)(b)). Non-compliance makes the trust unenforceable, not void, so later signed writing (for example a letter admitting the trust) can satisfy the section as evidence. Hugh's words in the kitchen are not enough. A deed is not required. Section 53(2) preserves resulting, implied and constructive trusts, so Ivy might still argue one of those. The tempting wrong answer is that trusts need no formalities. That is true only for trusts of personalty.

Law of Property Act 1925, s 53(1)(b), (2)

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Trusts Law · Formalities: disposition of an equitable interest

Abel is the sole beneficiary under a bare trust of 5,000 shares in a private company, held by trustees. Abel telephones the trustees and says, 'From now on hold the shares for my daughter Beth instead of me.' The trustees agree. Nothing is signed. Abel dies a month later and his will leaves everything to his son Carl. Beth's solicitor asks whether Beth is entitled to the shares. Which of the following is correct?

1. Yes: the trustees agreed, and so the equitable interest passed to Beth.
2. Yes: shares are personalty, so no formalities are needed for any dealing with them.
3. No: Abel's interest could be assigned only by a deed registered with the company.
4. No: a direction to hold on trust for another is a disposition of a subsisting equitable interest, and s 53(1)(c) LPA 1925 requires signed writing.
5. Yes: Beth gave no consideration but equity will perfect a voluntary assignment.

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Answer: D. A disposition of a subsisting equitable interest must be in writing signed by the person disposing of it, or their agent (LPA 1925, s 53(1)(c)). An oral direction by an absolute beneficiary to his trustees to hold the property for someone else is a disposition within the section (Grey v IRC). Abel's telephone instruction is therefore ineffective, and the shares pass under his will to Carl. This differs from the creation of a new trust over personalty by the owner, which needs no formality. The tempting wrong answer is that shares are personalty, so no writing is needed. Section 53(1)(c) applies to equitable interests in any property.

Law of Property Act 1925, s 53(1)(c); Grey v Inland Revenue Commissioners [1960] AC 1

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Trusts Law · Constitution of trusts: Re Rose

Nicola signed a share transfer form giving her 2,000 shares in a family company to her nephew Owen, and delivered it with her share certificate to the company secretary on 3 May. The company's articles say the directors must approve every transfer and register it. Nicola died on 10 May before the directors met. Her will leaves everything to her sister Pam. Owen's solicitor asks whether Owen can claim the shares. Which of the following is correct?

1. Owen has the beneficial interest in equity, because Nicola had done everything in her power to transfer the shares.
2. Owen has no interest, because legal title never passed and equity will not assist a volunteer.
3. Owen has no interest, because the transfer was a gift made shortly before death.
4. Owen has a claim only if he provided consideration for the shares.
5. Owen has an interest only if Nicola had told the company that she wanted him to have them.

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Answer: A. Equity will not complete an imperfect gift (Milroy v Lord). There is an exception: where the donor has done everything that she alone needed to do to transfer title, and the rest depends on third parties, equity treats the gift as effective and the donor holds on trust for the donee until legal title passes (Re Rose; Mascall v Mascall). Nicola signed and delivered the transfer form and the certificate. Only the directors' approval remained. So Owen has the beneficial interest, and Pam takes nothing. The tempting wrong answer is that Owen is a volunteer. The rule in Re Rose exists for such a volunteer.

Re Rose [1952] Ch 499; Milroy v Lord (1862) 4 De GF & J 264

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Trusts Law · Constitution of trusts: Strong v Bird

Rafe told his daughter Zoe in 2022, 'The vintage car in the garage is yours.' He never gave her the car, the registration papers or any document. Rafe's intention to give her the car remained until his death in 2025. His will appointed Zoe as sole executor, and she took out a grant of probate. Rafe's other children say that the car is part of the estate. Which of the following is correct?

1. The gift remains incomplete, because equity will not perfect an imperfect gift in any circumstances.
2. The gift is valid as a donatio mortis causa, because Rafe made it in his own lifetime.
3. The incomplete gift has been perfected under the rule in Strong v Bird, because Zoe became sole executor and Rafe's intention continued until death.
4. The gift is incomplete, because the executor cannot be a beneficiary of the estate.
5. The gift is complete from 2022, because oral gifts of chattels are always valid.

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Answer: C. The general rule is that equity will not perfect an imperfect gift (Milroy v Lord). Under the rule in Strong v Bird, an imperfect lifetime gift is perfected if the donor's intention to make the gift continued until death and the donee later becomes the donor's executor or administrator, because the vesting of the estate in the donee completes the gift. Zoe was named as sole executor and obtained probate, and Rafe's intention continued. So the car belongs to her. The tempting wrong answer is that equity never assists. Strong v Bird is one of the exceptions.

Strong v Bird (1874) LR 18 Eq 315; Re James [1935] Ch 449

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Trusts Law · Constitution of trusts: Choithram v Pagarani

Rajiv was seriously ill. In front of two witnesses, he said, 'I give all my shares in Lotus Ltd to my charitable trust, the Rajiv Foundation.' He was one of three trustees of the foundation. The other trustees were present. Rajiv died before signing any share transfer. His sons challenge the gift, saying the shares were never transferred to the trustees. Which of the following is the best analysis?

1. The gift fails, because legal title never passed to the trustees and equity will not assist a volunteer.
2. The gift fails, because a gift to a charity needs consideration.
3. The gift is effective only if Rajiv's sons agree to it.
4. The gift is effective only because it was made in contemplation of death.
5. The gift is likely to be effective, because as one of the trustees of the foundation Rajiv held the shares on the foundation's trusts once the gift was declared.

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Answer: E. In Choithram v Pagarani, a donor declared a gift of his property to a charitable trust of which he was one of the trustees, and died before transferring. The Privy Council held that the gift took effect. The donor was a trustee, so the declaration meant that he held the property on the trust's terms, and the other trustees' legal title would follow. Rajiv's words, said in the presence of the other trustees, bind the estate in the same way. The tempting wrong answer is that equity does not help volunteers. Choithram shows that, because the donor is a trustee, the trust is constituted.

Choithram International SA v Pagarani [2001] 1 WLR 1

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Trusts Law · Constitution of trusts: declaration or transfer

Imran decided to settle 10,000 shares he owned in a private company on trust for his grandchildren, with his friend Tess as trustee. He signed a share transfer form in favour of Tess, but kept it and the share certificate in his desk. Nothing was sent to Tess or to the company. Imran later changed his mind. The grandchildren's solicitor argues that Imran must be treated as having declared himself trustee of the shares. Which of the following is correct?

1. The argument succeeds, because equity always treats an intended trust as a declaration of trust.
2. The argument fails, because Imran intended to create the trust by transferring to Tess, and equity will not treat a failed transfer as a declaration of trust.
3. The argument succeeds, because the grandchildren are beneficiaries and so can enforce it.
4. The argument fails, because shares cannot be held on trust.
5. The argument fails, because the grandchildren must provide consideration.

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Answer: B. A trust is properly constituted if the settlor declares himself trustee, or transfers the property to trustees (Milroy v Lord). Where the settlor intends to create the trust by transfer to another person and the transfer fails, equity will not give effect to the intention as a declaration of trust instead. Imran chose the transfer route, and it was incomplete, and unlike Re Rose he had not done everything he needed to do, because he never delivered the form or certificate. The grandchildren, as volunteers, cannot enforce the promise. The tempting wrong answer is to treat the failed transfer as a declaration. Milroy v Lord rejects that.

Milroy v Lord (1862) 4 De GF & J 264

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Trusts Law · Automatic resulting trusts

Dara transferred 90,000 pounds to trustees to hold 'for such of my nephews as reach the age of 25'. She made no gift over and no other provision for the money. Dara's only sibling, her brother, has died, and his only child, Kai, has now died aged 20, so no nephew can ever reach 25. Dara is still alive. Her solicitor asks what has happened to the fund. Which of the following is correct?

1. The trustees hold the money for Kai's estate, because he was the only nephew.
2. The trustees may keep the money for their own benefit, as trustees.
3. The money passes to the Crown as bona vacantia.
4. The trustees hold the money on resulting trust for Dara, because the beneficial interest has not been fully disposed of.
5. The trustees must give the money to charity under the cy-près doctrine.

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Answer: D. If a settlor transfers property to trustees on an express trust and the trust fails, or the beneficial interest is not wholly disposed of, the trustees hold the property on a resulting trust for the settlor (or the settlor's estate). This is an automatic resulting trust, which arises from the settlor's presumed intention not to benefit the trustees (Vandervell v IRC; Re Vandervell's Trusts (No 2)). Kai never met the condition, so the trust has no beneficiary, and nothing has been given on a gift over. The money goes back to Dara. The tempting wrong answer is that Kai's estate takes it. The interest was contingent on reaching 25, and never vested.

Vandervell v Inland Revenue Commissioners [1967] 2 AC 291; Re Vandervell's Trusts (No 2) [1974] Ch 269

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Trusts Law · Presumed resulting trusts

Mina and Joel are unmarried friends, not related. Mina bought a house in Leeds for 200,000 pounds in her sole name. Joel paid 60,000 pounds of the purchase price to the seller's solicitors, and Mina paid the rest. Mina lives there alone and Joel has never lived there. No document or conversation recorded what was intended. They have now fallen out. Joel claims an interest in the house. Which of the following is the best analysis?

1. Joel is likely to have a 30 per cent beneficial interest under a presumed resulting trust, unless Mina shows that he intended a gift.
2. Joel has no interest, because Mina is the sole legal owner of the property.
3. Joel has a 50 per cent interest, because the law presumes that co-purchasers share equally.
4. Joel has a 30 per cent interest only if there is a written declaration of trust.
5. Joel has a debt claim for 60,000 pounds but no interest in the house.

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Answer: A. Where A pays part of the price of property put into B's name, equity presumes that A did not intend a gift, and that B holds on resulting trust for A in proportion to A's contribution (Dyer v Dyer). The trust arises by operation of law, so no writing is needed (LPA 1925, s 53(2)). This is not a shared family home, so the resulting trust analysis applies rather than Stack v Dowden. Joel paid 30 per cent of the price. Mina can rebut the presumption with evidence of a gift or a loan. The tempting wrong answer is that sole legal ownership means no interest. Equity looks to the source of the purchase money.

Dyer v Dyer (1788) 2 Cox Eq 92; Law of Property Act 1925, s 53(2)

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Trusts Law · Presumption of advancement

In 2018 Ken paid 150,000 pounds towards a flat that was registered in the sole name of his adult daughter Lia. Ken has since fallen out with Lia. He says he never intended a gift and that Lia holds the flat on resulting trust for him. Lia says it was a gift. There are no documents. Which of the following is the best statement of the law?

1. The presumption of a resulting trust applies and Lia must prove that she was given the money.
2. The presumption of advancement applies only to a gift by a husband to his wife.
3. The presumption of advancement applies to a father's payment for a child, so Lia is presumed to have received a gift unless Ken proves that he did not intend one.
4. Ken wins automatically, because no deed recorded a gift.
5. The presumption of advancement has no effect where the child is an adult.

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Answer: C. A voluntary payment into another's name normally gives rise to a presumed resulting trust. In certain relationships, the presumption of advancement applies instead, and the transferee is presumed to have received a gift. This includes a father to his child and a person in loco parentis. The presumption is weak and can be rebutted by evidence of the transferor's intention at the time of the transfer (Pettitt v Pettitt; Antoni v Antoni). Ken must prove he did not intend a gift. Section 199 of the Equality Act 2010, which would abolish the presumption, has not been brought into force. The tempting wrong answer is that a resulting trust is presumed. That applies in unrelated cases, and not between a father and daughter.

Pettitt v Pettitt [1970] AC 777; Antoni v Antoni [2007] UKPC 10

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Trusts Law · Family home: joint legal owners

Pria and Ravi, an unmarried couple, bought a house in Bristol in 2009 in joint names. There was no declaration of their beneficial shares. Ravi paid 65 per cent of the deposit and mortgage, and Pria paid the rest. They had three children and shared household expenses for 14 years. They have now separated. The court must decide their beneficial shares. Which of the following is the best statement of the starting point?

1. The starting point is 65 per cent for Ravi, because shares follow contributions to the price.
2. The starting point is to divide the house by contributions, unless Pria proves that she did the housework.
3. The starting point is that Pria has no share, because Ravi paid most of the price.
4. The starting point is that the court decides what is fair, without regard to what the parties intended.
5. The starting point is equal shares, and the person claiming otherwise must show that they intended different shares, looking at the whole course of dealing.

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Answer: E. Where a home is bought in joint names and there is no express declaration of the beneficial interests, the starting point is that the beneficial interests are equal. This is a presumption of a joint beneficial tenancy, because equity follows the law. A party who claims a different share must show, by looking at the whole course of dealing between them, that they intended unequal shares (Stack v Dowden; Jones v Kernott). Unequal contributions to the price do not by themselves rebut it. The tempting wrong answer is shares by contribution, which is the position for commercial purchases and not the family home.

Stack v Dowden [2007] UKHL 17; Jones v Kernott [2011] UKSC 53

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Trusts Law · Family home: sole legal owner

Tom bought a house in Derby in his sole name in 2015, with a mortgage he alone pays. His partner Una moved in later. They never discussed ownership. Una paid for food, clothes and holidays from her salary and has redecorated the house. Tom paid all the mortgage and bills. They have now split up. Una claims a beneficial interest. Which of the following is the best analysis of her claim?

1. Una has a share under a resulting trust, because she contributed to household costs.
2. Una is unlikely to succeed, because she made no direct contribution to the purchase price and there was no agreement to share the house.
3. Una has a half share, because they lived together as a couple.
4. Una has a share by reason of s 53(1)(b) LPA 1925, because she lived in the house.
5. Una's claim succeeds, because decorating a house always creates a share.

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Answer: B. Where the home is in one person's name, a claimant must show a common intention constructive trust: a shared intention that she should have a beneficial interest, usually proved by express discussions or inferred from conduct such as direct contributions to the price or mortgage, and detrimental reliance (Lloyds Bank v Rosset; Curran v Collins). Una has not paid towards the price or mortgage, and nothing was discussed. Household spending and decoration do not normally support an inference. So her claim is unlikely to succeed. The tempting wrong answer is that living together creates a share. English law has no such rule.

Lloyds Bank plc v Rosset [1991] 1 AC 107; Curran v Collins [2015] EWCA Civ 404

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Trusts Law · Family home: quantifying shares

Sol and Jade bought a house in Cardiff in joint names in 2002 with no declaration of shares. They separated in 2008. Sol left, and Jade paid the whole mortgage and all repairs from 2008 to 2023 without any contribution from Sol. Neither spoke about their shares. Sol now seeks half the value. Which of the following is the best statement of how the court will approach the quantification of the shares?

1. The court must award equal shares, because the house was bought in joint names.
2. The court must award Jade the whole house, because Sol abandoned it.
3. The court will award shares in proportion to the original deposits only.
4. The court asks what the parties intended, inferring it from conduct, and if it cannot infer an intention it imputes one by deciding what is fair on the whole course of dealing.
5. The court has no power to depart from the legal title once it is joint.

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Answer: D. For a jointly owned home, the starting point is equal shares. The court may conclude that the parties changed their intention over time, and it can infer a common intention from their conduct. If that cannot be done, the court may impute an intention, which is the result that is fair having regard to the whole course of dealing (Jones v Kernott). Here, Jade bore the whole cost of the house for 15 years while Sol made no payments, which may justify an unequal division. The tempting wrong answer is equal shares in all cases. That is only the starting point.

Jones v Kernott [2011] UKSC 53

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Trusts Law · Fiduciary duties and unauthorised profit

Zara is trustee of a family trust that owns 30 per cent of the shares in Alpha Ltd. The trust instrument does not authorise trustees to profit. Using confidential information she gained as a trustee about Alpha's plans, she personally buys shares in Beta Ltd, a supplier to Alpha. The Beta shares rise and she makes a profit of 50,000 pounds. The trust suffered no loss and Zara acted honestly. A beneficiary asks whether Zara must hand over the profit. Which of the following is correct?

1. Zara must account for the profit, because a fiduciary must not profit from the position even if honest and the trust suffered no loss.
2. Zara may keep the profit, because the trust suffered no loss.
3. Zara may keep the profit, because she bought the shares with her own money.
4. Zara must pay the profit to the Crown, because it arose from a breach of fiduciary duty.
5. Zara may keep the profit if she tells the beneficiaries within a year.

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Answer: A. A trustee is a fiduciary and must not make a profit from the position without authority, and must not put herself in a position where her duty and interest may conflict. If she does make a profit from information or opportunities gained through the office, she holds it on constructive trust for the beneficiaries (Boardman v Phipps; Keech v Sandford). Honesty and lack of loss to the trust are no defence. Zara used information she gained as a trustee, so the profit belongs to the trust. The tempting wrong answer is that no loss means no liability. The rule is aimed at removing temptation and does not depend on loss.

Boardman v Phipps [1967] 2 AC 46; Keech v Sandford (1726) Sel Cas Ch 61

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Trusts Law · Charitable trusts: public benefit

A solicitor at a private client firm in Manchester is asked to advise five different clients who each want to set up a trust, using money they have available now. The solicitor must explain which of the proposed trusts is likely to qualify as a valid charitable trust under the Charities Act 2011. Which of the following proposed trusts is most likely to be accepted as a valid charitable trust?

1. A trust to provide university scholarships only for the settlor's own grandchildren.
2. A trust to campaign for a change in the law on fox hunting.
3. A trust to relieve poverty among the former and current employees of Bakers Ltd and their dependants.
4. A trust to run a private social club for members who pay an annual fee.
5. A trust to pay for holidays for the settlor's close friends.

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Answer: C. A trust is charitable if its purposes fall within the list in the Charities Act 2011, s 3 and it is for the public benefit (s 4). Relief of poverty is a charitable purpose. Trusts for poor relations or poor employees have been upheld, as poverty trusts are not subject to the strict personal nexus test (Dingle v Turner). The grandchildren scholarship trust fails because a class defined by family connection is a private class (Oppenheim v Tobacco Securities). Political campaigning is not charitable (McGovern v AG). The tempting wrong answer is the scholarship. Education is charitable, but the class is private.

Charities Act 2011, ss 3, 4; Dingle v Turner [1972] AC 601

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Trusts Law · Professional conduct: confidentiality of a former client

Four years ago, a firm acted for Harriet in setting up a family trust for her grandchildren. She gave the firm detailed information about her finances and her reasons for excluding her son Gareth. Gareth now asks the same firm to act for him in challenging the trust, and he asks the firm to use 'what you already know'. The firm no longer acts for Harriet. What is the correct professional conduct position?

1. The firm may use the information, because Harriet is now a former client.
2. The firm may act for Gareth if it tells Harriet in advance, because her consent is not needed.
3. The firm may use the information, because it relates to a trust that is now public.
4. The firm may give Gareth a summary of the information, but not the documents.
5. The firm must keep Harriet's information confidential, may not use it for Gareth, and should decline to act if it cannot act without using it.

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Answer: E. A solicitor must keep the affairs of current and former clients confidential unless disclosure is required or permitted by law or the client consents (SRA Code of Conduct for Solicitors, para 6.3). The duty does not end when the retainer ends. The firm holds information about Harriet that is relevant to Gareth's challenge, and Harriet has not consented to its use. The firm cannot give it to Gareth, and it cannot properly act against Harriet's interests while relying on it. Under para 6.5 it must not act for Gareth in a matter where his interests are adverse to Harriet's and it holds her material confidential information, unless effective safeguards remove any real risk of disclosure or Harriet gives informed written consent. The tempting wrong answer is that a former client's information is free to use. It is not.

SRA Code of Conduct for Solicitors, RELs, RFLs and RSLs, paras 6.3, 6.5; SRA Principles 2019, Principle 5

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Trusts Law · Trustees' duty of care

Two trustees each invest part of a trust fund in the same single speculative mining company, and the shares become worthless. One trustee, Pam, is a partner in a firm of solicitors who regularly acts as a professional trustee. The other, Quinn, is a retired bus driver acting without charge as a family trustee. The trust instrument says nothing about the standard of care. A beneficiary claims that both breached their duty of care under the Trustee Act 2000. Which of the following is correct?

1. Both trustees are held to the same standard, being that of an ordinary prudent businessman.
2. The duty is to take the care and skill reasonable in the circumstances, with a higher standard for Pam because of her professional knowledge and experience.
3. Neither trustee owes any statutory duty of care when exercising the power of investment.
4. Quinn is held to the higher standard because he is not paid.
5. Pam is not subject to the statutory duty because she is a solicitor.

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Answer: B. The statutory duty of care in the Trustee Act 2000, s 1 applies to the exercise of the power of investment and to certain other powers (Sch 1). It requires the care and skill reasonable in the circumstances, having regard to any special knowledge or experience the trustee has or claims to have (s 1(1)(a)), and, for a trustee acting in the course of a business or profession, to what is reasonable to expect of such a person (s 1(1)(b)). Pam is held to a professional standard, and Quinn to that of a prudent lay trustee. The tempting wrong answer is a single standard for both. The Act makes the standard depend on the trustee.

Trustee Act 2000, s 1, Sch 1

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