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Key Concept of Equity and Trusts
Equity is a crucial aspect that is instrumental for comprehending the alterations that materialize in the law of trusts. Both equity and trust are the most imperative concepts featured in the law of trusts. It includes the necessary elements like property and capital management.
Equity is all about connecting to fairness. It is a legal system and a body of law for addressing the difficulties that go down beyond the common law system's jurisdiction. The English law system was derived as a separate unit from the common law system between the 17th to 19th centuries.
In this, the chancellor's authority for overruling the law implemented by the judges in case he feels the law equitable. Owing to this, equity in the legal system operated as a system of principles and legal guidelines instead of established rules. Besides this, from the 17th century, the rules of equity merged into a system of precedents like in the common law.
On the contrary, according to the common law legal system, the trust is a legal entity made by the trustor in which the trustee has the right to handle the properties of the trustor in the third party's best interest. Trust is confidence laid by an individual in another individual, and the property included in this system is known as the trust property. The individual who instigates the trust is the author of the trust and the one for whom the trust gets created is known as the beneficiary.
You can create trust by following different modes such as inscribing a trust document duly signed by the author and the trustees, by oral declaration, or even through the author's will.
FAQ's on Equity and Trust
What are the most common types of trusts in the English Legal System?
The English Legal System articulates five types of trusts: the Life Interest Trust, Accumulation and Maintenance Trust, Bare trust, Discretionary Trust, and Charitable Trust.
What are the 'Maxims of Equity'
The Law of Equity features twelve maxims which are constructed on the principles of rights and duties and followed by the common philosophy of equity. Some of them include
- Equity will not agonize without a solution.
- Equity abides by the law.
- He who searches for equity must do the equity.
- He who comes to equity must approach with clarity.
- Interruption overcomes equity
- Equality is Equity
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