The need for the abolition of secret trusts

Trusts & Trustees (2017) 23 (4): 373

Trusts and Trustees > 2017 - Volume 23 > Issue 4, 1 May > Articles

Trusts and Trustees

Joshua Griffin

is a graduate from Worcester College, Oxford, and currently studying the BPTC at BPP University. Email:
jsgriffin7@gmail.com.
© Oxford University Press 2017

Abstract: Comprehensive review of secret trusts and all the theoretical and practical justifications for enforcing them
explains that secret trusts should be abolished because not only are these justifications inadequate, but
enforcement results in negative consequences also. Firstly, this article will set out the constitutional justifications for
enforcing secret trusts in spite of the formalities required by the Wills Act in order to explain that both traditional
theories are inadequate. Secondly, it will set out the pragmatic reasons for enforcing secret trusts, namely practical
usage, prevention of fraud, and certainty, in order to show that they also fail to justify enforcement of secret trusts,
resulting in negative consequences.
Private Client

Introduction

The unjustified and unnecessary doctrine of secret trusts should be abolished. Beyond being mere historical
peculiarities with tenuous, at best, constitutional justification, there is no good reason for the law to enforce them.
The purported reasons in favour of enforcing secret trusts are not only unfounded, but often also result in negative
consequences. Hence, it is necessary to abolish secret trusts, rather than to quietly allow them to continue. First, I
will briefly summarize and reject the constitutional justifications for subverting the Wills Act 1837 to enforce secret
trusts, namely 'dehors the will theory' and 'fraud theory'. Secondly, I will set out the reasons for enforcing secret
trusts, in order to show that these reasons fail to justify enforcement as well as the negative consequences of
enforcement.

Constitutional justification

The Wills Act 1837 requires that any testamentary disposition1 is made in writing and signed by the testator.2 The
testator's signature must be witnessed and attested by two witnesses, who cannot be beneficiaries under the will.3
Formalities fulfil evidentiary, cautionary, and channelling functions.4 The need for the evidentiary function is greater
for wills, since the deceased is, by definition, no longer able to express her intention. The strict formality
requirements of the Wills Act ensure that there is clear evidence of the testator's intention, supported by two
impartial witnesses.

Secret trusts are trusts in which the legatee receives rights under a will on the basis of an agreement with the
 The need for the abolition of secret trusts

testator, prior to her death, that she would hold the rights on trust for someone else. In cases of fully secret trusts,
the will gives no indication of the existence of a trust. For half secret trusts, the will indicates the

Trusts & Trustees (2017) 23 (4): 373 at 374

existence of the trust, but is silent with respect to the beneficiary of the trust. In order for the testator's informal
wishes to be enforceable as a secret trust, the testator must communicate to the legatee her intention that the rights
be held on trust, and the legatee must agree to hold the rights on trust.5 For half secret trusts, communication and
acceptance must be prior to the execution of the will6 and cannot be inconsistent7 with the terms of the will. These
trusts do not comply with the formality requirements under the Wills Act, but are nonetheless valid.

The enforcement of secret trusts is prima facie contrary to the Wills Act, undermining fundamental principles of
democratic legitimacy, parliamentary supremacy, and the rule of law. In principle, the courts cannot go against the
clear wording of a statute, or legislative intent. To do so requires a holistic and purposive approach to the
interpretation of the statute, such as under the Human Rights Act,8 or restricting the interpretation of formalities so
that they are not used to achieve fraud.9 There are two differing views that explain why the formality requirements
under the Wills Act do not apply for secret trusts: 'dehors the will' theory and the 'fraud theory'.

For our purposes, it is irrelevant whether secret trusts are constructive or express. The effect of enforcing secret
trusts is to ignore the formalities of the Wills Act. Whether it is done directly (by recognizing an informal express
trust) or indirectly (by imposing a constructive trust to reflect expressed intentions), the courts are sidestepping the
formality provisions of the Wills Act.

Dehors the will

The dehors the will theory10 asserts that secret trusts exist outside of the will, and hence the Wills Act does not
apply. According to this theory, the agreement between the testator and legatee constitutes a declaration of trust.
The trust is inter vivos, hence the formalities under the Wills Act do not apply. However, the trust is not constituted
until the legatee receives the trust property under the will.11

The main problem with the dehors the will theory is that it treats a secret trust outside of the will merely because it is
not included in the specific document understood by laypeople as a 'will'. However, as Critchley12 identifies, a 'will'
under the legislation means 'any … testamentary disposition'.13 Further, she shows that secret trusts have the
defining characteristics14 of a testamentary disposition; they are revocable (the testator can make a new will) and
ambulatory ie take effect upon the testator's death.15 While Re Gardner (No 2)16 seems to indicate that the trust is
not ambulatory, the decision would still be incorrect even under the dehors the will theory. The trust does not come
into effect until the testator's death, and is constituted by the testator's will. Despite being outside the 'will
document', the secret trust is nonetheless a testamentary disposition, and within the operation of the Wills Act.

Furthermore, Critchley identifies that the declaration of an express inter vivos trust is an implausible construction of
the facts,17 and contrary to the rule against after-acquired property being capable of forming the subject matter of a
trust.18 Under ordinary trust rules, a secret trust would fail to fulfil the

Trusts & Trustees (2017) 23 (4): 373 at 375

requirements of certainty of intention and of subject matter, even if the Wills Act did not apply.

A stronger argument in favour of dehors the will theory, presented by Matthews,19 is that the Wills Act 1837 only
applies to testamentary gifts of the legal estate and does not apply to testamentary trusts. He argues that since
section 53(1)(b) Law of Property Act 192520 requires that a trust of land is evidenced by signed writing or by will,
that but for this subsection, there would be no formality requirements for will trusts. Otherwise, the reference to 'by
 The need for the abolition of secret trusts

his will' would be unnecessary. In his view, it makes sense the original provisions in the Statute of Frauds 1677;
section 5 concerned legal estate,21 while section 7 concerned equitable estate. The Wills Act 1837 extended the
requirement of wills to personal property, but not to testamentary trusts. Perhaps a similar argument, which
nonetheless faces the same objections, is that the Wills Act does not apply to secret trusts because the creation of
a trust is not a 'disposition' within the meaning of 'testamentary disposition'.22 An equitable interest is created rather
than transferred to the beneficiary.23 However, this is an unlikely construction of the legislation for three reasons.
First, the reference to wills in section 53(1)(b) is not necessarily of legal significance, but merely for clarification.
Secondly, it seems unlikely that judges having been applying the legislation incorrectly for so long. Finally, one of
the primary reasons for requiring strict formality requirements for testamentary dispositions is the inability of the
testator to provide any further evidence. This equally applies for testamentary trusts—there is no reason to
distinguish them.

Therefore, secret trusts cannot be considered dehors the will.

The fraud theory

If secret trusts are not dehors the will, it must be the case that the courts are enforcing a testamentary disposition,
in spite of the lack of formalities. The justification for the non-application of the Wills Act is that it prevents the
statute as being used as an 'instrument of fraud'. The aim is to stop a legatee, who breaches her agreement with
the testator by denying the existence of the secret trust, and subsequently relying on the absence of required
formalities under the Wills Act to prevent proof of the trust. There is nothing particular about the fraud itself, only
that the fraudster relies on the formalities under the Wills Act to continue or cover up her fraud. The principle
originates from the judicial interpretation of the Statute of Frauds,24 and has also been applied to other statutes.25

Assuming that it is constitutionally legitimate to restrict the application of a statute to prevent it being used as an
instrument of fraud, the 'fraud theory' still faces problems because it equates the legatee's breach of agreement
with fraud. While breach of agreement is a relatively mild type of fraud, the mildness itself does not present
problems with fraud theory. The real issue with breach of agreement is its circularity, which means that it fails to
explain or justify enforcement of secret trusts. Before explaining the circularity of the fraud theory, I will explain that
the nature of the fraud involved is not so mild as to undermine the fraud theory.

Challinor objects to the broad conception of fraud on the basis that it amounts to a 'bald assertion that the testator's
wishes should be respected, even if he has put them into effect in a manner that is not acceptable'.26 The difference
between secret trusts and other ineffective dispositions is that the testator's

Trusts & Trustees (2017) 23 (4): 373 at 376

wishes are defeated, not due to her own fault, but due to the legatee's breach of agreement. The defeat of the
testator's wishes is not only outside of her control, but also due to the actions of another autonomous individual.
The authorities frequently highlight breach of agreement as a core element of the fraud, rather than mere defeated
intentions of the testator.27

Furthermore, she states that the broader version of fraud, adopted in Blackwell v Blackwell,28 which encompasses
both types of secret trust, is too mild to 'justify equitable intervention in the face of strict statutory provisions in the
same way that a malus animus does'.29 The difference between the narrow and broad versions of fraud is less
significant than they seem. Since the courts have never required fraudulent inducement,30 the only possible
distinguishing feature of the broad version of fraud is the lack of personal benefit to the fraudster. Personal benefit
to the fraudster is not a requirement or relevant factor in fraud in other areas of law, such as tort law31 or criminal
law.32 The distinction between the narrow and broader conceptions of fraud is less significant than Challinor
presents. While the fraud involved is mild, it is not so mild as to defeat the fraud theory.
 The need for the abolition of secret trusts

The fraud theory fails to justify the enforcement of secret trusts because its reliance on breach of agreement is
circular. To claim that breach of an agreement to hold the rights on trust constitutes fraud presupposes the
existence of an obligation to follow the agreement, and, therefore, the enforceability of secret trusts. Agreements,
and promises, are prima facie not legally enforceable; there is no universal legal obligation to follow an agreement.
The law requires something more than a mere agreement to enforce it, such as consideration, intention to create
legal relations, formalities, the 'three certainties',33 and reliance.34 To enforce a secret trust because of the existence
of an agreement (breach thereof constituting fraud) fails to explain why these agreements should be treated
differently by being legally enforceable. Either, it presupposes the answer to the question we are asking, namely the
existence of a legal obligation; or, it justifies the enforcement on the basis of a mere agreement, failing to
distinguish it from other otherwise unenforceable agreements.35 Hence, the fraud theory fails to justify the
enforcement of secret trusts, not simply because of the mild nature of fraud, but because the justification itself is
circular.

Therefore, the non-application of the Wills Act 1837 in order to enforce secret trusts is not constitutionally justified
by either the dehors the will theory or the fraud theory.

Reasons to enforce secret trusts

Regardless of constitutional justification, secret trusts should be abolished because there is no good reason for
enforcing them. Establishing the absence of reasons to have secret trusts is important because, even if they were
constitutionally justified or put in statutory form, there would still be no good reason to keep

Trusts & Trustees (2017) 23 (4): 373 at 377

them. Further, the argument is not merely an academic one with no consequence; secret trusts are still alive and in
use.36

By assessing the reasons for enforcing secret trusts, we are trying to determine whether the law is justified by
imposing an obligation in these circumstances. To assess what constitutes 'a good reason', it will not be useful to
examine general and abstract theories of when the law should interfere.37 Instead, we should consider secret trusts
in the context of the formalities of wills. We should ask whether the benefit of enforcing secret trusts outweighs the
benefit of requiring the formalities under the Wills Act. A reason will be good enough to justify enforcing secret trusts
if it either better achieves the same ends as the Wills Act, or achieves ends that are, in the circumstances, more
valuable than those of the Wills Act.

The purpose of the formalities of the Wills Act is to ensure the testator's wishes regarding her estate are followed
after her death. The requirement that the will must be in writing compensates for her inability to personally clarify or
testify her intention after her death. The requirement of two disinterested witnesses attesting the signing of the will,
the grant of probate and public access to it all help to ensure that the testator's intention has not been subject to
fraud, undue influence or duress. The grant of probate also ensures the validity of the will.

I will consider three different reasons for the law to enforce secret trusts to show that they are unfounded, namely (i)
practical uses, (ii) prevention of fraud, and (iii) that they are too well established.

Practical uses

It would be a good reason to keep secret trusts if one of their practical uses served a useful or valuable purpose.
The value of a purpose for which they are used will be assessed in the same way as 'good reasons', with reference
to the purposes of the Wills Act. To assess the practical uses of secret trusts, we will see how secret trusts are
actually used; although, demand for them itself38 is not a good enough reason to keep them. The practical use must
 The need for the abolition of secret trusts

also be a necessary (ie not superfluous) and effective way of achieving its aim. To this end, I shall examine
numerous practical uses of secret trusts to assess whether they provide a good enough reason to keep them. The
numerous uses for secret trusts can be generalized into three categories, namely (i) social secrecy, (ii) hiding the
beneficiary's interest, and (iii) informal wills.

Social Secrecy

'Social secrecy' is the purpose of a secret trust where it is used to hide a disposition that would otherwise result in
social repercussions. Wills are public documents after the testator's death and the grant of probate, allowing
anyone to see the beneficiaries of their will. Secret trusts keep the identity of the beneficiary hidden.

The historical social reason for enforcing secret trusts was typically to leave rights after death to 'socially
embarrassing' beneficiaries, namely illegitimate children and mistresses.39 This original purpose is evidently
outdated. Social attitudes towards legitimacy have changed and the 'keeping of mistresses' is equally outdated. The
primary motive for these outdated secret trusts appears to be for the testator to protect her reputation and legacy.

Nonetheless, modern testators may still wish to keep certain dispositions secret for fear of social re-

Trusts & Trustees (2017) 23 (4): 373 at 378

percussions. Meager, in her enlightening survey40 of legal practitioners specializing in probate, yields invaluable
information about the modern reasons for using secret trusts. One respondent to Meager's survey stated that a
reason for using secret trusts would be in order to make gifts not approved by the surviving family.41 Another
respondent referred to a more specific scenario, where 'a gentleman [who] wished to make a gift to a lady friend
without causing her any embarrassment as she was a friend in “reduced circumstances”'.42 Despite the evolution of
social attitudes, the fear of social repercussions has remained, albeit for different reasons to mistresses and
illegitimate children. The motivations have developed from protecting one's own legacy or honour, to preventing the
upset of others.

Furthermore, these dispositions not only avoid social embarrassment or emotional upset of those close to the
testator, but also have some practical value. Surprisingly, respondents to Meager's survey cited 'reducing the risk of
a disposition being challenged'43 as a reason for using secret trusts. Disapproved dispositions are much more likely
to be challenged. The inherent secrecy of secret trusts means that it is unlikely that someone could object to it.
Hence, despite being viewed as unreliable,44 secret trusts also appear to have a practical value.

However, secrecy fails to resolve the underlying problems that result in social repercussions over wills. It is not
uncommon for conflicts and emotional upset to arise over a will; the cause is often the grief at the loss of a loved
one, as much as the will itself. Furthermore, secrecy does not solve emotional upset caused by other dispositions,
such as being written out of a will. Communication between the testator, friends, and relatives is more likely to
resolve conflict than sweeping dispositions under the rug. The existence of the doctrine of secret trusts may lead to
suspicious and paranoid attitudes between beneficiaries, friends, and relatives. These attitudes may ultimately
make challenges to wills more likely. While it is true that individuals are entitled to privacy, this is not an absolute
right and does not necessarily apply where transparency is needed, such as public trials or probate. Additionally,
the flipside of the practical value of avoiding challenge to these dispositions is that the testator loses protection by
formalities from fraud, undue influence, and misinterpreted intentions. Ensuring the testator's intentions are clear,
free from fraud, and free from undue influence is more important than hiding particular dispositions.

Even if we accept that the law should aid testators who fear their will will result in social repercussions, it does not
follow that secret trusts are necessary or effective in achieving this aim. Secret trusts are not necessary for an
individual to hide gifts that would result in social repercussions. Individuals can achieve the same secrecy by
making an inter vivos gift, an inter vivos trust or a contract for the benefit of a third party.45 None of these means are
 The need for the abolition of secret trusts

public and would achieve the secrecy the testator wants. If we do need a new method to allow individuals to make
secret gifts, secret trusts are not effective at achieving this. Notwithstanding the secrecy of the disposition, the
identity of the secret trustee (eg a solicitor, or anyone outside the family) or the absence of particular known assets
of the testator would raise suspicion. The trust will become public if the trustee or beneficiary reveals it, or if the
trust ever needs to be enforced. The gift may be obvious if someone known to the testator suddenly comes into
money after the testator's death.

Trusts & Trustees (2017) 23 (4): 373 at 379

Even if secret trusts are both effective and necessary to allow testators to hide testamentary dispositions, then
secret trusts should be a statutory, rather than common law, creation. As discussed above, secret trusts inherently
lack constitutional justification. If they are truly needed, they should be recognized and regulated under the Wills
Act. A priori, any changes or exception to the formalities under the Wills Act should be done through it. Statute
could also make provision for means of enforcement that retain secrecy, such as requiring that the probate registry
is informed of the legatee and beneficiary's identities, and giving it means to compel legatees to follow the secret
trust. Statute could even surpass the need to use a trust by directly allowing secret or hidden dispositions in wills. A
statutory footing would not only provide a better constitutional basis for secret trusts, but also present an opportunity
to improve them.

Concealing the beneficiary's interest

Secret trusts can also be used to conceal the beneficiary's interest in the subject matter of the trust (or at least the
extent of that interest). The trustee can conceal it from anyone who is not already aware of the trust, including the
beneficiary. Historically, secret trusts were used to effect testamentary gifts of land in favour of charities, which were
at the time void.46 This reason for making a secret trust is now outdated, since such gifts are no longer void.

The testator may wish to keep the beneficiary's equitable interest secret so that she does not lose her existing
rights. For example, two respondents to Meager's survey had advocated the use of secret trusts for 'the avoidance
of the loss of state benefits'47. As Meager admits, these secret trusts would be intended to deceive.48 Similarly,
there is the 'slightly less dubious proposition'49 of using a secret trust 'where the beneficiary is contemplating
divorce and the testator does not want the legacy to benefit the beneficiary's spouse in any way'.50 It is conceivable
that a secret trust could equally be used to avoid tax liability.

The secrecy is used to subvert existing legal rules. Partners in divorce are under an ongoing obligation to make 'full
and frank disclosure' of relevant information and facts51 including if they are the beneficiary of a trust, while benefits
claimants must declare their income and capital.52 Since even third parties can be guilty of benefit fraud for
dishonestly or knowingly failing to give prompt notification of a change of circumstances,53 the trustee and settlor
are potentially guilty of benefit fraud. It is not appropriate to use this secrecy to avoid existing legal obligations.
These secret trusts would put a beneficiary in breach of her legal obligations, unless she was kept in the dark
herself.

Nevertheless, the aim of hiding the beneficiary's interest in order to avoiding inheritance affecting divorce or
benefits entitlement will be, in the long term, ineffective, even if the beneficiary is kept in the dark. Upon revealing
the trust in the divorce example, the beneficiary's spouse could seek a variation order to take into account the
change in circumstances.54 Similarly, the benefit claimant will have been overpaid, and can be ordered to repay
benefit overpayment,55 regardless of her innocence.

Any argument promoting the use of secrecy to avoid these obligations is not an argument in favour of keeping
secret trusts, but in fact an argument to change the existing legal rules and obligations. If an individual thinks it is
unfair that inheritance is taken into account for benefits entitlement, then ideally she would like to change the rules
on benefit entitlement.
 The need for the abolition of secret trusts

Trusts & Trustees (2017) 23 (4): 373 at 380

She only favours secret trusts as an alternative secondary means to achieve her desired aim of excluding
inheritance from benefit entitlement. Secret trusts themselves simply create an arbitrary exception to the existing
rules, only applying to testamentary dispositions in a particular form (ie secret trusts) of which most people are
unaware.

Alternatively, a testator may wish to hide, not the existence, but the terms of the trust from the beneficiary. A
respondent to Meager's survey cites an occasion where a testatrix used a half secret trust, so that 'full extent of the
trustee's powers and discretions kept from the beneficiary. While, unlike above, such a purpose seems perfectly
legitimate, it is hard to square with a beneficiary's right to collapse a trust under Saundiers v Vautier.56 The
beneficiary's rights often trump the wishes of the testator—why should we allow secret trusts to shift the balance in
favour of the testator? If more value should be placed on the testator's wishes, then why only allow it for informal
testamentary trusts? As above, the use of secret trusts is merely a secondary means to achieve a desired aim of
limiting the position of a beneficiary in favour of the settlor.

'Informal'wills

The most common reason for using a secret trust appears to be to allow the testator to avoid the formality
requirements whenever she wants to make a change to her will. The testator can leave all their estate to the
trustees by their will, and inform the trustee how they would like it to be distributed. If they wish to change how their
estate will be dealt with, they can simply inform the trustee instead of having to go through the formality
requirements to write a new will.

The ability to essentially opt out of the Wills Act is clearly undesirable. Anyone who advocates the use of secret
trusts for these purposes would likely rather that the formality be relaxed for wills in general. There is no justification
for an arbitrary exception to the formality requirement under the Wills Act for those with specialized professional
advice. If there is a problem with testamentary formalities, it is with the general rule and cannot be resolved by an
arbitrary exception.

Prevention of fraud

Even if 'the fraud theory' is not a constitutional justification for enforcing secret trusts, their utility in preventing fraud
may justify keeping them, for example, on a statutory footing. The enforcement of secret trusts purportedly prevents
fraud, because it stops the trustee from keeping the subject matter for herself after agreeing to hold it on trust for
another.

It is clear that in a scenario where a testator leaves rights to a legatee absolutely with a private understanding that
she will hold the rights for another, there is a risk of fraud. The legatee will appear to be legitimately holding the
rights absolutely, and will have control over the evidence showing the existence of a breach of trust.

It is understandable that a judge, whose perspective is limited to the dispute in front of her, will see enforcing secret
trusts as preventing fraud. She will only see cases where a legatee denies the existence of an agreement to hold
certain rights received under a will on trust. Enforcing the informal trust prevents the fraud in the case before her,
and logically other cases like it.

Nonetheless, the enforcement of secret trusts for the purpose of preventing fraud is problematic because it is
ineffective at achieving this. Recognizing them encourages their use and, since they are inherently at risk of fraud,
the total risk of fraud is increased.
 The need for the abolition of secret trusts

If secret trusts were not enforced, then it would be rare for a testator to leave rights to a legatee on a private
understanding that it be held for another. Since the concept of a trust, let alone a secret trust, is relatively obscure
to the general public, a self-written will is unlikely to leave property to a legatee on such a basis. Professionals
would not draft such a

Trusts & Trustees (2017) 23 (4): 373 at 381

provision into a will without explaining the risk to the testator that the legatee keeps the rights for himself. In
contrast, enforcing secret trusts promotes leaving rights to a legatee on the basis of a private agreement, since the
law will step in if the legatee decides to renege on the private agreement.

Enforcing secret trusts is ineffective at preventing this fraud for three reasons. First, very few people will know about
the existence of the secret trust. Potentially, only the legatee (and potential fraudster) and the testator will know of
their agreement to hold on trust. Hence, if the legatee does renege on her agreement after the testator's death, no
one will be aware of her agreement and be able to challenge her for its breach. Secondly, even if the beneficiary or
third parties are aware of the legatee's agreement to hold on trust, they will have difficulty proving it. After the
testator's death, the legatee is in the best position to produce evidence that the secret trust exists—which she will
not be inclined to do if she intends to keep the subject matter to herself. The beneficiary will have trouble proving
the existence of the trust if the only evidence available is the legatee's testimony, or documents in her possession.
While evidence of the agreement could be held by a third party, this undermines the secrecy of the trust and leads
to a risk of collusion between the legatee and third party. Finally, the beneficiary, despite knowing of and being able
to prove the existence of, the secret trust, may be unwilling to enforce it. Enforcement requires exposing the
secrecy of the trust, and the beneficiary may not want to go against the testator's wishes, especially if the secret is
damaging to her legacy or to the beneficiary themselves, or risks upsetting people close to the testator.

The judicial position that secret trusts prevent fraud is understandable, since by definition they can only see cases
where the three conditions above are met. Judges are limited to the case before them, and are ill-suited to consider
broader policy issues to which Parliament would be better suited. The enforcement of secret trusts is perhaps a
cautionary tale against judicial intervention.

Enforcing secret trusts does prevent fraud in cases where the beneficiary knows about the secret trust, is able to
prove it and also willing to expose the testator's secret. However, enforcement ultimately increases the risk of fraud
by encouraging the use of secret trusts where these conditions are not met. It is better to rely on the formalities of
the Wills Act, risking the odd case of fraud in an attempted secret trust by a testator who is misinformed or who has
accepted the risks, than by increasing the risk of fraud by encouraging the inherently prone-to-fraud secret trusts.

The reasoning above equally applies to arguments for enforcing secret trusts to prevent unfairness or
unconscionable conduct. As with fraud, enforcing secret trusts creates the scenario that gives rise to the possibility
of unfairness or unconscionable conduct.

Too well established

It could be argued that secret trusts are too well established to be abolished. Regardless of their merits or lack
thereof, we are stuck with them because they are supported by over a hundred years of clear authority. It is true
that judicial abolition of secret trusts would be undesirable due to its retrospective effect, affecting many carefully
planned testamentary arrangements. However, it does not rule out prospective legislative abolition. The majority of
ordinary people do not know about secret trusts—they largely appear in professionally drafted testamentary
arrangements. Delaying the coming into force of the abolition by a couple of years would allow practitioners, who
would be aware of such an important piece of legislation, to contact clients and to alter their testamentary
 The need for the abolition of secret trusts

arrangements. Due to the specialized and obscure nature of secret trusts, little, if any, publicity would be needed to
inform the general public.

Trusts & Trustees (2017) 23 (4): 373 at 382

Conclusion

In summary, secret trusts should be abolished. Neither the fraud theory nor the dehors the will theory are capable of
providing constitutional justification for allowing the enforcement of trusts that fail to meet the formalities under the
Wills Act. The former is based on ultimately circular reasoning, while the latter is based on non-legal definition of a
'will' and fails to fulfil the requirements of a declaration of trust. Furthermore, regardless of constitutional justification,
there are no good reasons to justify enforcing secret trusts. The purposes for which they are used either do not
provide good reasons to enforce them or are superfluous or ineffective at achieving these aims. They do not
prevent the commission of fraud, nor are they too well established to be abolished. In addition, the enforcement of
secret trusts results in negative consequences of allowing individuals to subvert existing legal rules (tax, benefits,
divorce) and increases the risk of fraud. While placing secret trusts on a statutory footing could resolve some of
these problems, the fact remains that there is no reason to enforce secret trusts. Ultimately, the ideal solution is
abolition of secret trusts—to solve these problems, it is necessary to get rid of this outdated and unjustified judicial
creation.

1 Wills Act 1837, s 1 'the word “will” shall extend to … any other testamentary disposition'.
2 ibid, s 9.
3 ibid, s 15.
4 L Fuller, 'Consideration and Form' (1941) 41 Columbia Law Review 799.
5 Blackwell v Blackwell [1929] AC 318, 334: 'The necessary elements, on which the question turns, are intention,
communication, and acquiescence.'
6 Re Keen [1937] Ch 236.
7 ibid.
8 Human Rights Act 1998, s 3.
9 Peckham v Faria (1781) 3 Douglas 13.
10 Cullen v Attorney-General for Ireland (1866) LR 1HL 190.
11 Thynn v Thynn (1684) 1 Vern 296.
12 Patricia Critchley, 'Instruments of Fraud, Testamentary Dispositions, and the Doctrine of Secret Trusts' (1999) 115
LQR 631, 634.
13 Wills Act 1837, s 1.
14 ibid 636.
15 Critchley (n 12) 639–40.
16 [1923] 2 Ch 230.
17 ibid 634.
18 ibid.
 The need for the abolition of secret trusts

19 Paul Matthews, 'The Words Which Are Not There: A Partial History of the Constructive Trust' in Charles Mitchell
(ed), Constructive and Resulting Trusts (2010).
20 As well as the Statute of Fraud, s 7 that predated it.
21 Statute of Frauds, s 5 only required testamentary gifts of land to be contained in a will.
22 Wills Act 1837, s 1.
23 William Swadling, 'Property' in Andrew Burros (ed), English Private Law (3rd ed, 2013) 4.149.
24 Peckham v Faria (n 9).
25 Law of Property Act 1925 in Rochefoucauld v Boustead [1897] 1 Ch 196.
26 Emma Challinor, 'Debunking the Myth of Secret Trusts?' [2005] Conveyancer and Property Lawyer 492, 497.
27 Lord Westbury in McCormick v Grogan (1869) LR 4HL 82: 'you cannot constitute a fraud in this matter unless you
find that there is a distinct and positive promise, the non-fulfilment of which brands the party with disgrace as having
personally imposed on the testator.' Blackwell v Blackwell (n 5) 329: 'a testator having been induced to make a gift on
trust in his will in reliance on the clear promise by the trustee that such trust will be executed in favour of certain named
persons, the trustee is not at liberty to suppress the evidence of the trust and thus destroy the whole object of its
creation.'
28 Blackwell v Blackwell (n 5).
29 Challinor (n 26) 496.
30 Lord Hatherly's statement that fraudulent inducement was required in McCormick v Grogan (n 27) was rejected in
Blackwell v Blackwell (n 5) 329: 'in that case, however, the present point was not argued and, as pointed out by Hall V.-
C. in the latter case of In re Fleetwood, the earlier authorities were not cited.'
31 Pasley v Freeman (1789) 3 TR 51.
32 Fraud Act 2006.
33 Knight v Knight (1840) 3 Beav 148.
34 Crabb v Arun District Council [1975] EWCA Civ 7.
35 For example, promises to gift.
36 Rowena Meager, 'Secret Trusts - Do They Have a Future?' [2003] Conveyancer and Property Lawyer 203.
37 For example, Harm Principle: see JS Mill, On Liberty (J. W. Parker and Son, 1859).
38 Meager (n 36) 212.
39 Challinor (n 26) 498.
40 Meager (n 36)
41 ibid 208.
42 ibid.
43 ibid.
44 ibid 209.
45 Contract (Rights of Third Parties) Act 1999.
46 Challinor (n 26) 499.
47 Meager (n 36) 207.
48 ibid 208.
49 ibid.
 The need for the abolition of secret trusts

50 ibid.
51 Practice Direction 9A – Application for a financial remedy – Annex – 7 Disclosure.
52 Social Security Administration Act 1992, ss 111A, 112, 115.
53 ibid, ss 111A (1E), ss112 (1D).
54 Matrimonial Causes Act 1973, s 31.
55 Social Security Administration Act 1992, sch 9, para 4.
56 (1841) EWHC J82 (Ch).

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