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Secret Trusts

When a Testator (a person who has made a Will) dies his/her Will becomes available for public inspection. So, what can a Testator do should he/she wish to conceal certain gifts within his/her Will from public scrutiny?

The simple answer is by way of a Secret Trust. Essentially there are two types of Secret Trusts:-
Fully Secret Trusts
A Fully Secret Trust arises where the gift on the face of the Will is an absolute gift but in fact, the beneficiary who is set to receive the gift is not the true beneficiary.
For example, Jenny makes a Will and states that a sum of £20,000 will be given to her friend Bernadette. If a Fully Secret Trust was in operation, Bernadette will be holding the £20,000 gift as a Trustee for the true Beneficiary. The Trust does not appear on the face of Jenny’s Will and therefore the public are unaware of the real object of the gift.
For a Fully Secret Trust to be valid, the Testator must communicate the true intention of the gift to the Trustee and acceptance of this intention must be provided by the Trustee at any time up to the date of the Testators death.
Half Secret Trusts
A Half Secret Trust arises where a Testator leaves a gift to a person as a Trustee on the face of the Will but the actual object/s of the Trust are kept secret.
For example, John transfers his property to Bernadette as a Trustee for the purposes communicated to her. As long as John communicated the purpose of the Trust to Bernadette either before or at the same time of making his Will and Bernadette accepted the same before or simultaneously with John making his Will, the Half Secret Trust will be valid.
Communication made after the execution of the Will but before the death of the Testator is not valid. If the Trust fails for any reason the Trustee does not take the property but holds the property on Trust for the residuary beneficiaries.
What evidence is required to make these types of Trusts? What actually needs to be communicated to the Trustee? What constitutes as acceptance?
To find out more please contact Shivali Kapoor.

Shivali Kapoor-Gill

Posted:

Shivali Kapoor-Gill

Associate

Shivali is an Associate Solicitor member of the Wills, Trusts and Estates Team and manages all Private Client matters at our Leicester office. She qualified in 2014 and has experience advising on the preparation of Wills, Lasting Powers of Attorney and deals with Grants of…