Certainty of objects

The objects of a trust will depend on the type of express trust in question. This is quite a
complicated area so I will just explain the different tests used to ascertain certainty of objects.
For fixed trusts, it must be possible to identify exactly who all of the beneficiaries are in order for
the trustees to distribute the property correctly. This is known as the complete list test. What
this means is that a full list of all the beneficiaries must be able to be drawn up when the
property is to be distributed, it is not necessary to draw up a complete list when the trust is
created.
Fixed Trust
The question of certainty of objects may occur in the context of either a fixed or a
discretionary trust. The difference between the two is crucial: fixed trusts are constituted for the
benefit of pre-determined individuals or classes of individuals in which each is entitled in equity
to a fixed share; in contrast, in a discretionary trust it is within the gift of the trustees to allocate
the distribution of trust property among a defined class of beneficiaries, or even on occasion to
decide on the membership of a class of potential beneficiaries. Where fixed trusts are
concerned, a court should be able to rule with certainty as to who are the intended trustees and
beneficiaries.
Usually, a fixed trust establishes successive interests for the benefit of more than one
individual, such as where A is entitled for life and then B absolutely. It is therefore imperative
that a court should be able to identify exactly what share each individual should take. Therefore,
the trust may not be carried out properly if the number and identity of beneficiaries is unknown.
In practice, a strict test is required for fixed trusts where it must be possible to identify each
constituent member of a class.
Indeed, the Court of Appeal confirmed in the case of IRC v Broadway Cottages that in
fixed trusts linguistic and evidential certainty as to beneficiaries are both essential. This means
that the court applies a so-called complete list test, to fulfil which it must be able to draw up a
complete list of the beneficiaries. The evidence suggests that the courts have been willing to
take a measured, accommodating approach in such situations. In Re Wynn a judge refused to

enforce an arrangement purporting to give the trustees the power to overrule any objection that
might be raised by the beneficiaries in a dispute between the two entities.

The court was unwilling to accept the idea that its jurisdiction would effectively have
been subsumed to the decisions made by the trustees. However, this strict approach stands in
contrast to other cases such as Re Tuck, in which it was accepted that a third party could rule
on an expression that appeared on the face of it to be lacking in conceptual certainty. In fact,
the third party (the Chief Rabbi) was able to adjudicate on the concept of a suitable wife,
whose presence was a precondition of the trust, though this could equally have applied to a
trustee rather than an external specialist.
The flexibility of the complete list test has proved to be very sensible, because it allows
the court to make every effort to enforce the trust. Most importantly, it does vitiate a trust if the
exact whereabouts of some of the potential members of a class is not known, as long as it is
possible to arrive at a complete list of beneficiaries in a conceptual sense. The shares owing to
absent beneficiaries may be paid into an escrow account in lieu of their claim or, failing that,
conclusive proof of their entitlement under the trust. Further, a so-called Benjamin Order will
permit trustees to distribute the trust property to the known beneficiaries pending the emergence
of any absent beneficiaries, provided that the former will undertake to compensate the latter
parri passu according to their appropriate share in the event of their reappearance.
Alternatively, the trustees may publish an advertisement in the London Gazette (and the
appropriate forum in any other countries or jurisdictions, if relevant) to give unknown
beneficiaries constructive notice of their entitlement. This is an excellent way of ensuring an
equitable outcome for the known beneficiaries who it would surely be wrong to disinherit on
the basis of an absence of others, over whom they have no control while giving absent
beneficiaries notice of their rights. This system for fixed trusts has operated well since IRC v
Broadway Cottages and, as the more recent case of Re Tuck shows, the courts have used their
licence to promote equitable outcomes. However, the category of discretionary trusts has
proved more contentious, though, as the next section will explain, the courts have adopted an
equally sensible and flexible approach to their operation in recent decades.

Discretionary Trust
The original position in discretionary trusts was that the court would echo the IRC v
Broadway Cottages approach by relying on the complete list test. However, in McPhail v
Dalton this was reconstituted by Lord Wilberforce. In the immediate case, a deed was drawn up
in order to provide monetary benefit to members of staff of a company as well as the relatives
and dependants of such people. However, it was not possible for the court to draw up a
complete list of all the members of the class: this meant that under the conventional test the
trust would have failed. However, Lord Wilberforce ruled that the operative question in such
cases was one of whether a court could say with certainty that a given individual was a member
of a class: on the facts, this was satisfied, and the arrangement was enforced by the court.
Therefore, the question was one of conceptual rather than evidential uncertainty.
Providing that a given description of beneficiaries is clear in a conceptual sense, the
arrangement will not fail because it might be difficult to work out whether a given person
satisfies the description. In each case the exact words must be scrutinised to work out whether
the test is fulfilled. Once the class is determined as being conceptually certain then the matter
of a beneficiarys inclusion is a question of fact, rather than law. Provided that the class is
conceptually certain, it will not prejudice the trust if the geographical location or continued
existence of a beneficiary is not known to the court and/or the trustees.
It appears that in recent decades the test laid out in McPhail v Dalton has functioned
effectively, allowing the courts a measure of flexibility but still vitiating arrangements that are
clearly conceptually uncertain. Quite rightly, certain categories of beneficiaries have been
disallowed on the basis that they are clearly not conceptually certain. In Re Barlows Will
Trusts,the court ruled that friends was not sufficiently certain because it would not be possible
for a court to adjudicate on such a concept, given its subjectivity. The decision avoided the
ridiculous prospect that such potential beneficiaries could prostrate themselves before a court
emphasising their attachment to the settlor in order to enrich themselves.

On the other hand, family ties are rightly identified as conceptually certain because the
members can be identified with recourse to a straightforward family tree. Elsewhere, the courts
have refused to enforce trusts that are practically, or administratively, unworkable such as those
trusts purporting to nominate a class of individuals that is simply too wide. In McPhail v Dalton,
Lord Wilberforce gave the example of the residents of Greater London.
Lord Wilberforces workability criteria has been refined in the ensuing decades after
McPhail v Dalton in order to produce a more coherent set of guidelines for courts of equity. In
Re Hays Settlement Trust, the court held that it would be prepared to hold that an intermediate
trust (one excluding certain specified individuals, and including everyone else) would be
administratively unworkable because the a trustees obligations in relation to a discretionary
trust are more stringent than for a power of appointment: as trustees are under an obligation to
distribute trust property, they would have to carry out a wider and more systematic survey than
those with power of appointment. The sensible logic behind this decision is that an obligation to
carry out such a survey could itself run down the trust fund through expenses, and thus defeat
the object for which it was intended in the first place. Therefore, Lord Wilberforces criteria
represents an important practical qualification of the courts zeal to implement a trust if at all
possible, vitiating such an arrangement where a class of persons is so hopelessly wide or
capricious that a trustee or a judge would have little hope of fulfilling their obligations without
running down the trust fund significantly.
If no certainty of objects can be ascertained, the trustee will hold the property on trust for
the settlor this is a resulting trust. This means the settlor can demand the legal title back from
the trustee and then create another, this time valid, trust. If the trust is testamentary, the trustee
will hold the property on trust for the benefit of those entitled to the residuary estate of the
deceased.