Some unusual contested probate cases provide examples of inheritance disputes and challenges to a will where one person asserts that he is entitled to receive a benefit that has specifically been provided to another person.
It is possible for a perfectly valid will, which passes all of the property in the estate to specific named individuals, to nevertheless be subject to a trust that requires some of the estate property to be passed to another person who has not been specifically named within that will.
This occurs when one or more of the named beneficiaries within that will, were separately instructed by the will-maker to ensure that the benefit is passed to another person (not named within the will).
Where property is transferred to a particular individual, on the face of it as a gift for his exclusive use, equity will not allow that individual to treat the property as being his own if he was aware that the benefits of such property must be passed to a 3rd person.
Such arrangements give rise to what is known as a secret trust. Usually, there is an arrangement whereby a beneficiary agrees to receive property which he will in turn passed to a 3rd party. For example, a close confidant of the deceased might agree to receive some property from the deceased, knowing full well that the property must be passed to the deceased’s illegitimate child (of whom the deceased’s legitimate family are unaware). On the face of it, the family believed that the confidant is the beneficiary, but the confidant knows that the illegitimate child must receive the benefit of the property.
There is a small but important distinction between a fully secret and a half secret trust, which is determined by whether or not the “special arrangements” are mentioned within the text of the will. With a half secret trust, mention is made of arrangements without disclosing what those arrangements are. For example, the clause in the will may stipulate that an asset is given to the deceased’s friend, and further mentions that “he knows what he must do with it”. With a fully secret trust, the will does not mention the arrangement at all and for all intents and purposes, the clause passing the gift of the friend is merely that.
There must be evidence that the will-maker intended to create a trust over his property, which is given to one person, but in favour of another person. That intention must be communicated to the secret trustee, and the secret trustee must accept his responsibility under the intended trust.
In order to prove the existence of these arrangements, it is necessary to establish all the usual ingredients of a trust. There must be certainty of intention, certainty of subject matter, and certainty of beneficiaries. Therefore, a mere honourable engagement will not suffice, and nor will a mere moral obligation.