RES exam question on Contract & Agency Law: A testator's will leaves his house to his trusted friend Ben 'absolutely'
A testator's will leaves his house to his trusted friend Ben 'absolutely'. The testator had previously communicated to Ben (who agreed) that Ben would hold the house on trust for the testator's secret child. This arrangement is best described as:
- AA resulting trust
- BA half-secret trust
- CA constructive trust
- DA fully secret trust
Show answer & explanation
Answer
D. A fully secret trust
Explanation
A fully secret trust arises when the face of the will shows an outright gift to the legatee ("absolutely"), but the testator has communicated a trust obligation to the legatee — who accepts it — before or at the time of making the will. Courts enforce the secret trust in equity to prevent the legatee from unconscionably keeping the property. A half-secret trust is one where the will itself says the property is held "on trust" but does not state the terms.
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