This advice will address the legal position of Eileen concerning the property left to her in the will of her late sister, Nora. The central issue is whether a valid secret trust was created in favour of Louise, and if so, what the consequences are of Louise witnessing the will and predeceasing Nora. The analysis will be based on Irish law, with reference to relevant English case law where it is persuasive. The advice will conclude that a valid trust was not created, and therefore Eileen holds the property on a resulting trust for Nora's estate.
The Validity of the Secret Trust
Secret trusts are an exception to the formal requirements for wills laid out in the Succession Act 1965. This legislation requires that a will be in writing and signed by the testator in the presence of two witnesses, who must also sign. Secret trusts operate outside, or dehors, the will (Delany, 2007) and are enforced by equity to prevent fraud. There are two types: fully secret trusts, where there is no indication of a trust on the face of the will, and half-secret trusts, where the will states that the legatee is to hold the property on trust, but does not specify the terms of that trust.
In this case, Nora’s will leaves her property to Eileen “to be held upon such trusts as I have already communicated to her.” This wording clearly indicates the existence of a trust, making this a half-secret trust (HST). For a valid HST to be created, three certainties must be present: intention, communication, and acceptance (Keane, 2017).
1. Intention
The testator must have intended to create a binding legal obligation on the trustee. The words used in Nora's will, “to be held upon such trusts”, demonstrate a clear and mandatory intention to create a trust, rather than simply imposing a moral obligation. This requirement is therefore satisfied.
2. Communication
For an HST, the terms of the trust, including the identity of the beneficiary, must be communicated to the trustee before or at the time of the execution of the will. This rule was established in the English case of Blackwell v Blackwell [1929] AC 318 and has been adopted and affirmed in Irish law by the High Court in Re Prendiville (decd) [1990] ILRM 650.
The facts present a significant problem in this regard. Nora’s will was made in 2000, but she only communicated the terms of the trust—that the property was to be held for Louise—in 2010. This communication occurred ten years after the will was executed. As the communication was not made before or at the time the will was made, it fails to meet the strict requirement for the creation of a valid HST.
Furthermore, the wording of the will itself creates an additional issue. The will refers to trusts “as I have already communicated to her.” This implies that communication had taken place before the will was made in 2000. However, the actual communication took place in 2010. This inconsistency between the past-tense wording of the will and the future communication is fatal to the trust. The English case of Re Keen [1937] Ch 236 is directly relevant here. In that case, the will referred to a trust that would be communicated, but the details had in fact already been given to the trustee in a sealed envelope. The court held the trust failed, partly because allowing evidence of communication that was inconsistent with the express terms of the will was not permissible. In Nora’s case, the inconsistency is even more stark: the will refers to a past communication, but the only communication happened in the future. On this basis, the trust must fail for lack of valid communication.
3. Acceptance
The trustee must accept the trust obligation, either expressly or by silent acquiescence. In Moss v Cooper (1861) 1 J&H 352, it was held that if a person remains silent after being informed of the testator's intention, their silence will be taken as consent. When Nora told Eileen of her wishes, Eileen “did not reply.” Based on the principle in Moss, her silence would likely be construed as acceptance of the trusteeship. However, since the trust fails on the grounds of improper communication, the issue of acceptance is ultimately moot.
The Consequence of the Failed Trust
Since a valid HST was not created, the question arises as to what happens to the property. Because the will explicitly states that Eileen is to hold the property "upon such trusts," she is clearly identified as a trustee and cannot take the property for her own benefit. Equity will not permit a trustee to profit from the failure of a trust (Brady, 2007).
In this situation, where a half-secret trust fails, the intended trustee (Eileen) holds the property on a resulting trust for the testator's estate. This means the property "results" back to Nora's estate and will be distributed among her next of kin according to the rules of intestacy, as set out in Part VI of the Succession Act 1965.
Issues Arising if the Trust were Valid
For the sake of providing comprehensive advice, it is useful to consider the other issues that have arisen, assuming for a moment that the trust had been validly communicated.
1. Louise Witnessing the Will
Eileen has discovered that Louise witnessed Nora’s will. Under section 82 of the Succession Act 1965, any gift to a beneficiary who attests the will is void. This is to prevent fraud or undue influence by beneficiaries. However, the courts have consistently held that this rule does not apply to beneficiaries under a secret trust.
The reasoning is that the beneficiary does not take their interest under the will itself, but from the trust which operates dehors (outside) the will. The gift arises from the personal obligation accepted by the trustee. This principle was established in the English case of Re Young [1951] Ch 344, where a beneficiary of a secret trust had witnessed the will but was still held to be entitled to his legacy. This approach has been viewed favourably in Ireland. In O’Brien v Tynan [2004] IEHC 404, Laffoy J referred to Re Young without disapproval. Therefore, it is highly likely that an Irish court would follow this reasoning, and Louise’s role as a witness would not have invalidated her interest under the trust.
2. Louise Predeceasing Nora
The doctrine of lapse provides that if a beneficiary named in a will dies before the testator, the gift to them fails and falls into the residue of the estate. The question is whether this doctrine applies to secret trusts.
There is some conflicting English authority on this point. In Re Gardner (No. 2) [1923] 2 Ch 230, it was held that the beneficiary’s interest under a secret trust was created by the agreement between the testator and the trustee as soon as it was made, and therefore did not lapse when the beneficiary predeceased the testator. However, this decision has been widely criticised by academics and has not been followed. The more orthodox and accepted view is that a secret trust, like any testamentary gift, is conditional upon the beneficiary surviving the testator. The trust is not fully constituted until the testator's death, as the will is revocable up to that point. Therefore, the doctrine of lapse should apply (Pearce and Mee, 2017).
If the trust for Louise were valid, her death before Nora would cause the gift to lapse. In such a scenario, Eileen would hold the property on a resulting trust for Nora’s estate, as there is no other named beneficiary. This leads to the same outcome as the trust failing for want of communication.
Conclusion and Advice to Eileen
To summarise, the half-secret trust Nora attempted to create in favour of Louise has failed. The primary reason for this failure is that the communication of the trust’s terms to Eileen in 2010 occurred after the execution of the will in 2000, which is contrary to the established rules for half-secret trusts in Irish and English law.
As a result, Eileen cannot take the property for her own benefit, as the will clearly shows she was intended to be a trustee. She holds Nora's entire estate on a resulting trust. This means she has a legal duty to ensure the property is passed to the administrator of Nora’s estate to be distributed to Nora’s next of kin according to the rules of intestacy.
Even if the trust had been properly communicated, the fact that Louise died before Nora would have caused the gift to lapse, leading to the same result: a resulting trust in favour of Nora's estate. The fact that Louise witnessed the will is irrelevant.
Therefore, my advice to Eileen is that she is not entitled to the property beneficially. She holds it as a trustee for Nora’s estate and should take steps to transfer it to the persons entitled on Nora’s intestacy.
References
Brady, J. C. (2007) Succession Law in Ireland. 4th edn. Tottel Publishing.
Delany, H. (2007) Equity and the Law of Trusts in Ireland. 4th edn. Thomson Round Hall.
Keane, A. J. (2017) Equity and the Law of Trusts in the Republic of Ireland. 3rd edn. Bloomsbury Professional.
Pearce, R. and Mee, J. (2017) The Law of Trusts and Equitable Obligations. 7th edn. Oxford University Press.
Cases
Blackwell v Blackwell [1929] AC 318
Moss v Cooper (1861) 1 J&H 352
O’Brien v Tynan [2004] IEHC 404
Re Gardner (No. 2) [1923] 2 Ch 230
Re Keen [1937] Ch 236
Re Prendiville (decd) [1990] ILRM 650
Re Young [1951] Ch 344
Legislation
Succession Act 1965
