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[1964] Ch 288. This case is frequently cited as authority for the proposition that a Trust can be constituted fortuitously (see fortuitous vesting). See ConstitutionOfTrusts for a more detailed discussion.

Re Ralli’s Wills Trusts [1964] Ch 288, HC

Facts of the Case

The testator died leaving his estate upon trust for his wife for life with remainder absolutely to his two daughters. One of the daughters created a marriage settlement and will covenanting all her existing and future property upon trust for the children of her sister. The husband of her sister was appointed one of the trustee’s of the settlement. Subsequently, the husband of her sister was also appointed a trustee of the original settlement. However, she died before transferring property to the husband of her sister, which made the husband of her sister sole surviving trustee of both the settlements – hers as well as the original one created by the father.

The issue involved was whether her property from the original settlement created by the father was held upon trust for her sister’s children, as covenanted by her marriage settlement, or it shall be treated as her personal estate?

Decision of Chancery Division

Holding that the vested reversionary interest was her existing property pending assignment to the trustees of her marriage settlement, Buckley J. observed:

1. Her property was subject to the trust created upon her marriage settlement for the children of her sister. 2. After her death, the husband of her sister (her personal representative) held her share of the original settlement created by the father subject to the trust created upon her marriage settlement. 3. The question to be decided is “who can successfully assert equity against the husband of her sister disentitling him to stand on his legal right?” 4. The object of the marriage settlement was not to transfer the property to the husband of her sister for his own benefit, but to hold it on the trusts of the settlement.

Ratio

It is immaterial how the trustees acquire the property, provided that their acquisition was not improper. The settler has to expressly declare himself a trustee pending transfer and the court will not treat is as an implication.