Once admitted to probate a Will becomes available for the public to view. So then how would a testator benefit a person by his Will while keeping this disposition concealed? Enter the “secret trust”.
A secret trust arises where a testator leaves property to a person (A) in his Will, but that person has accepted that he will actually hold this property on trust for another person (B). The trust is fully secret as no reference is made to it in the Will; on the Will it appears as a gift from the testator to A, and B is not referred to.
There are also “half-secret trusts”. A half-secret trust arises where a testator refers to the existence of the trust in his Will but does not define the terms of it. For example “I give [gift] to A on the trusts which I have communicated to him.
To be enforceable a half-secret trust must be described in the Will as having been communicated to the trustees prior to the execution of the Will or at the same time as the execution. It must also be proven that the trust was communicated to the trustees and that they accepted it. If the trust is not communicated to the trustee before the execution of the Will the trust will fail and the trustees hold the property for the residuary beneficiaries.
Fully secret trusts must be communicated to the trustee before the testator’s death, but not necessarily before the execution of the Will. If the trust is not communicated to the trustee in the testator’s lifetime the trust fails and the gift takes effect as an absolute gift to the would-be trustee.
3 comments
iain
20th April 2023 at 9:16 am
Hello The Society of Will Writers
With regards to half secret trusts and a pilot trusts in a will,
is there any major differences?
the pilot trust beneficiaries are not named in the will and the pilot trust i believe does not become a public document.
However the pilot trust deed is often stored with the Will so a more formal arrangement.
Maybe a reference to the pilot trust is made in the will, details of the nameof the trust are revealed.
kind regards
Iain
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Siobhan Rattigan-Smith
20th April 2023 at 10:26 am
Hi Iain,
The major differences are the formality and the secrecy surrounding both arrangements. Though at their core both trusts could be administered in the same way as discretionary trusts, secret trusts do send to be simpler arrangements.
You are correct that the pilot trust doesn’t become a public document, so creating a pilot trust in lifetime and then directing assets to it via the will does lend some level of privacy. The difference between that arrangement and a secret trust though is that the details of that trust and the trustees to it will be visible on the will, whereas with a fully secret trust no reference to any trust is made at all keeping the entire arrangement concealed.
Ultimately though secret trusts are not an arrangement that are often recommended due to issues with enforcing them properly.
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iain
20th April 2023 at 12:23 pm
Thank you for explaining
Siobhan
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