Wills, Probate and Trusts

Introduction to Formalities required for transferring property

Formalities to comply with in order to declare a trust, transfer a property to trustees and make a gift.

Formalities

Property can be a real property such as land, grounds buildings, and rights over lands or it can be a personal property that includes cars, jewelry, paintings shares, bank accounts, patents, trademarks, etc.

To transfer each one of them requires formalities to be fulfilled if the formalities are not met then the transfer into a trust or transfer as a gift will fail and will not take effect

Land
  • Declaration of a trust involving land must be in writing or at least there must be written evidence of it
  • Transfer of land or any interest therein must be in writing (deed) for conveying and for creating a legal estate.
  • A boundary dispute does not require the formality of writing and can be dispensed orally
Example

Simon, intent to transfer his house to his wife, he must do so in writing (deed)

Goods and Chattels
  • Cars, jewelry, painting, etc requires an intention to give and there must be a manual delivery of such property or a deed (written document, signed and witnessed) will be required
  • However valuable property may be, a trust for personal property can be declared orally unlike land which has to be in writing
Examples

Simon intends to give his BMW to his son, he must hand over the car and necessary documents to his son or make a deed

Non-tangible Items
  • These are valuable rights such as shares, trademarks, patents, insurance policy, etc
  • Some form of writing is required to transfer such property, each property has its requirements to transfer and those requirements must be fulfilled for an effective transfer
  • Declaration of trust for non-tangible items can be oral but the disposition of any interest must be in writing
Examples
  1. Simon, declares orally a trust which includes all his shares in Tesco, an oral declaration of trust is good enough for such type of property. However, to transfer these shares to trust/ handing over to trustees, some form of writing is required. Which. in the case of shares, is by writing on the transfer form and registration by the company(Tesco) are essential to transfer the legal ownership from Simon to trust/trustees
  2. Simon hands over his shares in Tesco to his son Mike and states that they are from now on yours. However, for a gift to be effective, Simon has to fill the transfer form and send it to Tesco to change the legal ownership. Simply handing over the shares to his son will not complete the gift. It will remain Property of Simon
Disposition of Equitable Interest
General Rule

Disposition or assignment of any equitable interest must be in writing and must also be signed by the person who wants to dispose of it. The instructions to dispose of for an agent must also be done in writing as well.

Exceptions from Formalities

Following are exceptions to the general rule

Every Effort Test

Where the donor/settlor has done everything within his powers to change the ownership/ legal title of the property, courts will accept this as an exception and will enforce the transfer even though the formalities are not fulfilled

Examples
  1. Simon signs the transfer form and sends them to Tesco to change the legal title in the name of his son. However, Tesco for whatever reason failed to transfer the title to Simon’s son. As Simon has done everything possible on his behalf it will be considered sufficient by courts to declare that Mike is the owner of those Shares.
  2. Simon filled out land registry form to transfer his house to his son, which was signed and witnessed and handed over to his son Mike, who had sent them to Land Registry. Land registry for whatever reason does not register it. After some time, Simon and Mike quarreled with the effect that Simon now claims that it is still his house. As everything is done by Donor and Donee (Simon and Mike), the title may pass to Mike even though Land Registry has not done it yet.

Marriage Settlement

Marriage Settlement is another exception to the general rule that all the formalities of declaring a trust, transferring the property to a trust, or making a gift must be fulfilled.

  • A trust is established, on marriage, to provide for the husband and wife and the children that they hope to have in the future. They promise is in a deed (in writing) with the trustees that they would transfer any property to the trust that they acquire after marriage
  • The implied term that in the absence of Children (childless couple) the property will be held for next of kin
  • Only Husband, wife and children of marriage can enforce the promise
  • Next, of kin may inherit the property in cases where couples may not have any children but they cannot force the promise

Conditions for Marriage settlement

  1. The promise must be made on the occasion of the wedding
  2. It must be conditional only to take effect on the marriage taking place
  3. The promise must be made by husband and wife for the purpose of or with the view to encourage or facilitate the marriage.
Examples
  1. Alan and Julie promised a marriage settlement and promised to bring everything they earn after marriage into a joint account. Alan received the inheritance of £100,000 which he mistakenly deposited into his account instead of a joint account. Alan dies the next day. Julie as his wife and any children may enforce the marriage settlement promise made by Alan and £100,000 will be transferred to the joint account
  2. Alan and Julie promised a marriage settlement and promised to bring everything they earn after marriage into a joint account. Alan received the inheritance of £100,000 which he mistakenly deposited into his account instead of the joint account. Alan and Julie die the next day. They had no children and now Julie’s next of kin wants £100,000 to be transferred to the joint account. As they are not a party to the marriage settlement, they will not be able to enforce the transfer and £100,000 will go to the estate of Alan.

Death Bed Gifts

These are the gifts made whilst somebody is alive, but take effect on the death

Examples
  • George, while very sick, at the hospital gave keys of his BWM car to his son and told him, Son you have this car when I am gone and dies in the next two weeks
  • Lee, while very sick and expecting death in the near future, gave the keys to his house and deed to his daughter and said it’s all yours. I want you to keep them and dies in the next 6 months
  • Sam was visiting her boyfriend in the hospital who was gravely sick. He gave the keys to the safety box which contains his shares to Sam and told her that she can have all his shares in Tesco and Asda. However, her boyfriend survives the illness.

In the above examples, the formalities are not fulfilled, to transfer shares the transfer form must be filled and sent to Tesco and Asda. To transfer land or any interest in land must also be in writing and merely giving a key to a car does not make a person an owner of it. The formalities must be fulfilled

The exception to General Rule

 Deathbed gifts are an exception to the general rule on formalities. Following conditions must be fulfilled to obtain a deathbed gift without fulfilling the required formalities are as bellow

  • The person who is on death bed must have an “intention” to give a gift upon his/her death,
  • He/she is expecting to die in the near future and
  • Must provide some control over the gift to the donee

the person does not have to fulfill the formalities of writing and it will be a valid gift provided he/she had fulfilled the above-mentioned conditions

Examples
  • George, while very sick, at the hospital gave keys of his BWM car to his son and told him, Son you can have this car when I am gone and dies in the next two weeks. His son may take the BMW absolutely as all three conditions are met. George’s statement shows his intention to give, he died in the near future and handing over the keys of the car will fulfill the third condition.
  • Lee, while very sick and expecting death in the near future, gave the keys to his house and deed to his daughter Kimber and said it’s all yours. I want you to keep them and dies in the next 6 months. On a similar reason, Kimber may have the house although the formalities have not fulfilled
  • Sam was visiting her boyfriend William in the hospital who was gravely sick. He gave the keys to the safety box to Sam and told her that she will have all his shares of Tesco and Asda in the box. However, her boyfriend survives the illness. Here the gift will fail as William has survived the illness.

The Rule in Strong v Bird

If the Donee (to whom the gift is made) becomes Executor or Administrator, he/ she will take the gift absolutely without going further into the requirements of formalities.

Examples
  1. George, while very sick, at the hospital gave keys of his BWM car to his son and told him, Son you have this car and dies in the next two weeks. His son is also the executor of George’s will or he is appointed by the court as an administrator. The gift of BMW becomes absolute by becoming the Executor or Administrator. He can take the BMW absolutely
  2. Lee, while very sick and expecting death in the near future, gave the keys to his house and deed to his daughter Kimber and said it’s all yours. I want you to keep them and dies in the next 6 months. Kimber is appointed as an administratrix by the court. She now acquires the legal estate; the gift gets to the right person and the intention of the donor is respected.
Executors

A person chosen by the deceased person to execute his will in a will

Administrator

A person chosen by a Court to execute someone’s will

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Disclaimer​

While every effort has been made to ensure the accuracy of the information provided in this article, it does not constitute legal advice and cannot be relied upon as such. Each legal case and issue may have unique facts and circumstances, as a result legallex does not accept any responsibility for liabilities arising as a result of reliance upon the information provided. For further help and guidance, you can always rely on and seek advice from our experienced lawyers.

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