Why would a trustee hold merely a Personal Right, not any Property or Proprietary Right, to value credited to a bank account on trust? What exactly does &quot;value credited to a bank account on trust&quot; mean? Why wouldn't a trustee hold a Property/Proprietary Right to the value credited to a bank account on trust? But then why does the last quotation below from p. 52 mention the &quot;money credited to a bank account [...] transformed into a proprietary right&quot;? See why I'm wildered? Further, where the subject matter of the trust is a personal right, such as where a trustee holds the value credited to a bank account on trust, if the trustee becomes insolvent the beneficiary’s contractual claim to the value that is credited to the account will be an unsecured claim which ranks equally with all other such claims, since this is a personal claim at Common Law. Apprise me if you'd like me to quote the intermediary text. This thesis is also used to explain how the beneficiary obtains equitable rights where the trustee has only a personal right. So, for example, where the beneficiary asserts an equitable right in respect of a bank account, they are not asserting a right to the bank account, but instead to the trustee’s personal right to be paid by the bank; this is the beneficiary’s right against a right. Virgo, The Principles of Equity &amp; Trusts 2020 4 edn. Page 50. The modified nature of the equitable proprietary rights also explains how, although the trustee’s claim against a bank for money credited to a bank account is a personal claim, it is transformed into a proprietary right of the beneficiary if the trustee becomes insolvent or if the money credited to the account is misappropriated by a third party. This arises because of the ability of Equity to identify property in a fund.68 Equity is imaginative69 and sees that, where trust money is credited to a bank account, the beneficiary of the trust has a right to the value in the fund. It is not the fund itself that is held on trust, but rather the value in the fund, the credit, even where the fund is made up of value from different sources, such as where money from the trustee is credited to the account as well. Once this conceptual jump has been made, it is easy to treat the beneficiary’s rights to the value in the fund as a proprietary right, which persists against third parties save if they are a bona fide purchaser for value, even though the trustee has only a personal right against the bank. Op. cit. p 52.
People talk about &quot;depositing money&quot;, &quot;having money in the bank&quot;, and &quot;withdrawing money&quot; but these everyday expressions (used by banks as well as customers) do not accurately represent the legal reality. In the Middle Ages there was controversy about the legal nature of banking but in modern times it has been considered to simply be a debtor-creditor relationship. This legal position was confirmed by the House of Lords in the 1848 case of Foley v Hill. The relation between a Banker and Customer, who pays money into the Bank, is the ordinary relation of debtor and creditor, with a superadded obligation arising out of the custom of bankers to honour the customer's drafts; and that relation is not altered by an agreement by the banker to allow the interest on the balances in the Bank. The relation of Banker and Customer does not partake of a fiduciary character, nor bear analogy to the relation between Principal and Factor or Agent, who is quasi trustee for the principal in respect of the particular matter for which he is appointed factor or agent. This means that if you &quot;deposit&quot; money in a bank account you are actually loaning money to the bank. The money &quot;deposited&quot; is no longer your money - it is the bank's money (which is why they can use it to lend to borrowers). You no longer have the money but, instead, you are a creditor of the bank - you have a personal right to repayment by the bank of its debt to you. When you &quot;withdraw&quot; money from the bank you are simply requiring the bank to repay to you part of the debt the bank owes you. In most jurisdictions there is regulation of banking services which is designed to ensure that banks do not become insolvent. It addition there may be depositor protection schemes which ensure that if the bank does become insolvent depositors are protected to some extent (e.g. perhaps personal, as distinct from corporate, depositors might be protected to the extent of 80% up to a certain limit). But these schemes do not change the basic legal position that a &quot;depositor&quot; is simply an unsecured creditor of the bank with no proprietary rights. I think the point being made here by Virgo is that when someone deposits money in a bank the bank does not hold the money on trust for the person depositing the money. The depositor simply has a personal right to be paid the money by the bank - i.e. it is a simple debt. If the depositor is a trustee then the beneficiary has a proprietary interest in the depositor's personal right against the bank. Virgo is attempting to explain (by means of some theory contained in the part you have not quoted) how the beneficiary's proprietary interest in the trustee's personal right against the bank can get transformed into a proprietary right in the money itself so that the beneficiary is still entitled to it even if the trustee (or bank) becomes insolvent (or, depending on the circumstances, &quot;trace&quot; it in an equitable claim against a third party).
Yes. It is fairly common for there to be one owner at law, but another person who has a beneficial interest - such as a long-term cohabiting partner. This may arise because the parties set it up that way, or perhaps more often when courts find that there is a &quot;constructive trust&quot; or a &quot;resulting trust&quot;. See for example the concurring opinion of Lord Hope of Craighead in Stack v Dowden [2007] UKHL 17, Parties are, of course, free to enter into whatever bargain they wish and, so long as it is clearly expressed and can be proved, the court will give effect to it. But for the rest the state of the legal title will determine the right starting point. The onus is then on the party who contends that the beneficial interests are divided between them otherwise than as the title shows to demonstrate this on the facts. The resulting court process may find that the beneficial interest exists, or not, and what fraction of the property it represents. It's common to find situations where one party put up most or all of the whole purchase price of a house, which was then registered in both names, and they then disagree about whether it should be split 50-50 or otherwise - that's an example of the beneficial ownership differing in proportion from the (equal) legal ownership. (See Jones v Kernott [2011] UKSC 53 at paragraph 51 for an explanation of this particular pattern.) The same sort of case arises when a cohabiting partner does not own the house, but still contributes to the mortgage and other bills - then, depending on the facts at hand, there may be a &quot;constructive trust&quot;, and the partner is entitled to a share of the sale price of the house even though they are not its legal owner. A &quot;resulting trust&quot; might arise when someone contributed money for the purchase of the property, even though they didn't end up as a registered owner, but the parties acted in other respects as if they were joint owners.
It is certainly possible to give gifts to your relatives (or to anyone really). But, the harder question is whether or not it is really a gift. A characterization of a transaction as a gift is less likely to be questioned if it is between related parties, and it is less likely to be questioned if it isn't obviously a quid pro quo. If you told your brother that you would make a gift to him of all of the appreciation in the house, if he made the guarantee in advance, it would be a guarantee fee (or an equitable or nominee ownership) rather than a gift. But, with the timing and motives described in this post, it is certainly a closer call. The fact that the "gift" amount exactly matches the appreciation casts doubt on the theory that this is really a gift, but doesn't absolutely clearly require the conclusion that it is not. This could end up being resolved either way, and ultimately, could be very dependent upon the detailed facts and how they are presented to the person determining if tax is owed.
I would assume that the seller ('Transferor') still owned numbers 7 and 11 at the time of the sale. If so, this clause means that the owners of 7 and 11 (now and in the future) have a right of way on the path coloured blue on the plan. The land still belongs to number 9, but the owners cannot build on it so as to block the path. (As mckenzm comments, "on foot only" is an important qualification; the neighbours do not have a right to install utilities under the path, and the owner can put in obstacles that prevent bringing cycles down it).
If an amendment restates the entire trust, I have been told by an attorney that you can throw away the original trust documents because they are no longer valid. Note: I am not an attorney. I do not have any formal training is law so my answer is not reliable.
There are certain legal arrangements that are implied in law when a project or activity is carried out without forming a legal entity. The classification of the legal arrangements in question govern the legal rights of the parties. These arrangements are surveyed below. This is followed by a brief list, for contrast and completeness, of the main different kinds of entities that must be formed expressly and registered to come into existence. This overview is then applied to the specific questions asked. One is a trust. A trust arises by operation of law when a person (called a settlor) provides money or other property or legal rights to another person (the trustee) for the benefit of one or more persons (people who are called beneficiaries) and often for some purpose specified by the settlor. In the U.S. this was historically governed by case law from both courts of law and courts of equity. The concept of a trust and the broader concept of a fiduciary as a general concept are particular to common law systems and don't have a direct analog in civil law legal systems, although there are legal arrangements in civil law countries that have material differences from common law trusts that can be used in circumstances where trusts are used in common law countries. But, now, many states have adopted a statutory trust code that covers most issues of trust law fairly comprehensively. Guardians, conservators, and receivers, sometimes with rights arising by operation of law, or a private non-governmental appointment, but more often arising from a court order, are close cousins of trustees of trusts. Trustees, guardians, conservators, receivers, and agents are part of a group of kinds of people who are often collectively grouped in a larger category of people in charge of other people's property or rights called &quot;fiduciaries.&quot; Most often, the enterprises and properties managed by fiduciaries are not considered to be entities, even though the arrangement is similar to an entity. Some jurisdictions require some kinds of fiduciaries to file some sort of registrations or public filings, but these statutes typical regulate people who are already fiduciaries by operation of law or a court order, rather than requiring registration for the legal arrangement to come into existence. A related form of entity, which requires government registration as an entity in some jurisdictions, and can be formed without registration or similar formalities in others, is a business trust which will often have transferrable beneficial interests, the most common examples of which is a real estate investment trust (REIT) or a mutual fund, both of which are sometimes, but not always, organized as business trusts. Most businesses organized as business trusts are subject to considerable government regulation as securities and under tax law, and also under other laws specific to those entity forms. Another related concept in common law countries is a &quot;bailment&quot; (holding the property of another for safekeeping) by a bailee for a bailor and an escrow arrangement. France has a similar set of concepts in its civil code translated into English as &quot;deposits&quot; meaning &quot;bailments&quot; and &quot;sequestrations&quot; meaning escrow arrangements and similar relationships in Articles 1915 to 1963 of its Civil Code. Another is a general partnership. A general partnership arises by operation of law when two or more people jointly carry on business for the purpose of making a profit (whether or not they actually do), without forming some other entity. There is a uniform state law adopted in every state in some version or another, with minor state-specific variations, that governs general partnerships. A joint venture is almost indistinguishable from a general partnership. While codified now, in common law countries, general partnership law is a natural and organic outgrowth of the laws of trusts, fiduciaries and agency, that has evolved and been modified in the process of codification; while in civil law countries, general partnerships are just another kind of entity that isn't necessarily registered as an entity per se (although civil law countries generally have a category of registration-like regulation and accounting and banking rules that apply to all &quot;merchants&quot; whether or not they operate through entities). A third is an unincorporated association. An unincorporated association arises by operation of law when two or more people jointly carry on an activity for purposes other than making a profit, without forming some other entity. In some jurisdictions this is governed by a statute pertaining to them, while in others (and in part, even in states that have a statute) it is governed by common-law case law (drawn historically from both courts of law and courts of equity). In France, the civil code provides for a similar kind of unregistered entity known in English translation as a &quot;Partnership for Non-Commercial Purposes&quot; in Articles 1845 to 1870 of its civil code. A fourth and related notion, which is somewhere between an unincorporated association and a simple contract – which is not a general partnership because it is not carried out for profit – is a domestic partnership or civil union which is sometimes just a subcategory of contract, but in other cases is treated as a special kind of arrangement subject to case law or statutory regulation. Many state and local governments, and some national governments outside the United States, adopted domestic partnership and/or civil union laws that vary widely in their details, before same sex marriage became legal in the United States, to address the needs of same sex couples and/or unmarried opposite sex cohabitants and/or domestic arrangements involving more than two people. Along the same lines, while all countries allow qualified opposite sex couples and sometimes qualified same sex adult couples to form a marriage with a license from the government or government registration, some jurisdictions recognize marriage-like relationships that can be formed without government registration such as common law marriage, putative marriage, and de facto relationships that have legal rights associated with them. France, for example, in Article 515 of its civil code, has &quot;civil covenants of solidarity&quot; (PACS) akin to a civil union in the U.S. which must be formally registered giving rise to formal rights that are significant but less so than those created by marriage. French civil code Article 515 also defines a different category of relationship translated as &quot;concubinage&quot;, which is roughly equivalent to &quot;cohabitation&quot; in English which gives rise only to very limited legal rights, and may be (but need not be) governed by a custom drafted domestic partnership agreement called a &quot;convention de concubinage&quot; in French and can, but need not be, formally recognized in a &quot;certificat de concubinage&quot; or a &quot;declaration sur l'honneur&quot; which has only slight legal effect. The law of a &quot;convention de concubinage&quot; is somewhat akin to the kind of contract contemplated in the OP as it is an &quot;atypical&quot; contract that is not heavily regulated and not entered into primarily for the purpose of making a profit. A fifth is a contract. Sometimes a legal arrangement is contractually entered into and has the character of assigning people legal rights and obligations vis-a-vis each other without constituting an unincorporated entity or trust. A contract would typically involve less discretion than an unincorporated entity or a trust, although this isn't a hard and fast rule. In some respects, all entities are basically standardized and regulated contracts. Often, but not always, contractual rights are assignable. Corporations have their roots in the laws of trusts, contracts, and general partnerships, and eventually were given a statutory treatment not directly derived from those sources. This is governed mostly by case law. One kind of contract that bears similarity to what you describe in your example is called in economics a &quot;dominant assurance contract&quot; also known by the registered trademark specific provider of such arrangements known as &quot;Kickstarter&quot; contracts with a refund bonus, and similar in principle but without profit-making objectives, to a subscription agreement. It also bears similarity to a gift registry. Many leases create de facto partnerships and unincorporated associations, as do some real estate covenants. Another important (and heavily regulated) type of contract, which is often mistaken for an entity type since it is used in lieu of a parent-subsidiary relationship between a business headquarters and a particular location of a business, is a franchising agreement, in which the franchisor receives a share of gross profits and a fee from a franchisee who gets the right and the obligation to conduct business under a trademark in accordance with highly detailed central rules regarding how the business is conducted on a day to day basis, even though particular business locations are not enterprises owned by the franchisor. Legal multilevel marketing arrangements, and very similar illegal pyramid schemes are likewise typically organized on a contractual basis. There is also terminology for certain kind of contractual arrangements for non-business purposes, similar to those described in the question, in many civil law countries such as France (as opposed to countries with common law legal systems), but I am not familiar with all of this terminology itself (much of which lacks a direct and exact English language equivalent). A distinction is made procedurally, and in some formalities and requirements, between commercial contracts on one hand, and a category of contracts often translated as &quot;non-commercial contracts&quot; or &quot;civil contract&quot; on the other. For example, in France, arbitration clauses are usually not permitted in non-commercial contracts, and lawsuits to enforce non-commercial contracts must normally be brought at the defendant's domicile. Civil law countries also make a stronger distinction between &quot;typical&quot; contracts, which are spelled out in detail by statute and to which many default rules of law and mandatory rules apply, and &quot;atypical contracts&quot; which are treated with more skepticism by civil law courts and require more detailed express enumeration of the rights of the parties and of the reasons that the government should enforce those rights, than in common law country jurisprudence (although France eliminated this concept from its civil code in lieu of provisions enforcing substantive fairness in many cases, in an October 2016 overhaul of the contract law provisions of its civil code which had only been lightly amended before that since its original adoption in 1804). A sixth is co-ownership of property or other legal rights. Sometimes more than one person owns property and they have legal rights that arise from co-ownership of that property, even in the absence of any contract formation related to their co-ownership, in the absence of any imposition of a trust relationship on someone as a trustee for someone who is not the legal owner of property, and without an intent to carry out any particular enterprise or project with or without an intent to make a profit. This is mostly governed by case law but typically with modest statutory regulation of specific issues (like the right to bring a partition action if one party wants to end the co-ownership relationship). Sometimes co-owners also have a contract governing their respective rights (or a covenant, which is a contract that runs to successive owners of property, usually real estate). France recognizes along these lines &quot;Agreements Relating To The Exercise of Undivided Rights&quot; in Article 1873 of its Civil Code. A seventh is that when someone conducts business for the purpose of making a profit without working jointly with someone else, and without forming an entity, the enterprise is called a &quot;sole proprietorship&quot; (if business is actively conducted) or an &quot;investment&quot; (if profits arise mostly from passive ownership of property). Custom dictates that certain activities, like renting real estate, are considered investments, even when significant active management is involved, while other activities are usually considered to be sole proprietorships, even when they don't involve particularly pro-active conduct. The common law of agency and tax law are important to the operation and regulation of these businesses. In a related issue, a sole proprietorship or other entity (whether or not registered with the government) may often, either by formal registration or merely by dint of using it in the course of business, depending upon the jurisdiction, acquire legal rights in a trade name of an enterprise (also known as a &quot;doing business as name&quot; or &quot;dba&quot;) and/or trademarks associated with goods or services sold by an enterprise or sole proprietorship. An eighth is that when someone engages in a project for purposes other than making a profit without working jointly with someone else, or with an intent to make a profit that is consistently not achieved most of the time for a statutory number and proportion of years, and without forming an entity, that has a character similar to conducting a business, the enterprise is called a &quot;hobby&quot; for tax law purposes. This isn't comprehensive, however. Some economic activity undertaken without involving someone else or forming an entity, and without an intent to make a profit, simply doesn't have any name other than &quot;consumer spending&quot; or a &quot;personal and/or household activity.&quot; In contrast, entities formed by registration with the government, more or less exclusively, include corporations (both for profit and not for profit, including most corporations sole which are similar to trusts), limited liability companies, limited liability partnerships, limited partnerships, limited liability limited partnerships, limited partnership associations, mutual companies, and cooperatives. Entity formation is typically cheap and easy, although some kinds of entities such as national banking associations require special regulatory permission. Municipal governments, local governments such as school districts and special districts, and many independent government agencies are also often organized as governmental corporations and governed by specific statutes that apply to them. Is this possible at all or do you automatically found some sort of legal entity the moment you do this? This is often, but not always, the case when more than one person is involved, as the list above illustrates. Does such a stock issue have to be registered with the country’s equivalent of the SEC or are they exempt? If the latter, do you have to apply for such an exemption or is it granted automatically? It depends. In the U.S., the threshold question is whether an interest in the project is a &quot;security&quot;. There are many kinds of debt and equity investments that are automatically securities (even debt issued by a natural person, rather than an entity, which is transferrable and sold to members of the general public, could be a security). There is also a residual category called an &quot;investment contract&quot; which counts as a security if it meets a multi-factor legal test. There are various exemptions from the securities laws, and some are automatic, while others are not. But there are also some securities laws that apply to transactions involving securities even if the securities are exempt from formal registration with a government entity. The most notable of these is federal SEC regulation 10b-5 that imposes securities fraud liability when there is fraud within the meaning of the regulation in any transaction involving the purchase or sale of a security, even if that security is exempt from registration as such with a governmental entity. Some transferrable rights that are not necessarily securities but have some similarities to them are publicly traded commodities, security entitlements, negotiable instruments, warehouse receipts (particularly negotiable ones), and cryptocurrencies. In addition to regulation under state and federal securities laws, certain kinds of joint activities have other very specific regulations that apply to them (e.g. churches, or pooled investment funds, or cooperatives, or home owner's associations, or political parties, or election campaigns, or buyer's clubs, or timeshares) and there is really no way to know, in general, what those activities will be, without just learning about them from a general knowledge of a jurisdiction's laws. Is this regulated on a federal, state, or municipal level or does the issuer have to comply with the law on all levels? You have to comply with the laws on all levels. Normally, the legal rights of the parties primarily arise under state law in the U.S., and the disclosure requirements normally arise under both federal and state law. But no one level of government has exclusive jurisdiction to regulate private activities and it isn't unprecedented, for example, for local governments to authorize certain kinds of private enterprises (e.g. neighborhood associations in places that don't have HOAs, or composting co-operatives). Many local governments require all businesses that operate in their territory to be registered or licensed with them, no matter how they are legally organized, and state and local governments also often require special licenses for all businesses (regardless of form of organization) which are obligated to collect particular taxes such as lodging taxes, sales taxes, value added taxes, fuel taxes, alcohol or cigarette taxes, or &quot;head taxes&quot;. Similarly, many occupations and professions require government licenses at one level of government or another, and sometimes, more than one level of government. Some licenses are mostly federal (e.g. investment advisors and securities brokers), some are primarily state level (e.g. doctors and lawyers), and some are primarily local (e.g. street vendors and many construction trades). Are there relevant court cases that show what the penalties are for getting this wrong? Yes. But the question is too broad and vague to meaningfully discuss them. These cases are usually particular to the specific type of transaction involved. Does it make a difference in practice if the market capitalization of the project is almost certainly always well below $1 million? This is relevant to the kind of securities law exemptions that apply when a transaction is deemed to be a security under federal and state securities regulations. There are many exemptions and most of them have dollar limitations attached (although some do not). The background is that I want to start an online platform to make this easier for people, but of course I don’t want to get into legal trouble and I don’t want my customers to get into trouble. You haven't even begun to scratch the surface of the myriad legal issues presented. Your example sounds more like some sort of transferrable contract right, rather than a security (although it could be both), since it appears to be purchased primarily for use rather than as a profit making investment. It bears a fair amount of similarity to certain kinds of timeshare rights (and might even qualify as a timeshare under the regulatory and consumer protection rules of some jurisdictions which define them broadly). You need to develop a far more specific idea of what you plan to do and then meet with a lawyer to discuss the entire concept start to finish to spot as many legal issues as possible. This is not something you should try to do without a lawyer.
Executors and Administrators The executor of an estate is the person(s) named by the testator in their will. The executor is the legal representative of the deceased and is responsible for winding-up their affairs and distributing the estate's assets to the beneficiaries in accordance with the will. The executor will apply to the court for a "grant of probate" which gives them the legal authority (and protection) to act. If a person dies without a will (intestate) then the person who fulfills this role is called the administrator. An administrator is appointed by the court by their issuing "Letters of Administration". The administrator is responsible for winding-up the deceased's affairs and distributing the estate's assets to the beneficiaries in accordance with the law. Either role can be filled by any legal person which means an individual or a body corporate (company). They have a fiduciary duty to the beneficiaries and are legally liable if they screw things up. Your business Great idea! Unfortunately, with the current state of the law in most parts of the world its a non-starter. An executor holds a position of extreme personal and legal trust - they are the person that the deceased trusts to do the right thing by everyone they leave behind. I'm sure that you are trustworthy people but I (and most people) are going to want their executor to be someone like a spouse, sibling or child with whom they have familial ties, a close personal friend or a government public trustee. At the same time, banks, insurance companies etc. will not deal with anyone but the trustee (executor or administrator) and usually not until probate has been granted. They will also require that any funds be paid into a bank account set up by the trustee in their name in trust for the deceased unless the amounts are trivial. Ownership of social media accounts is a grey area of the law at present - they will not release passwords except to legally authorized representatives and sometimes not even then.
According to the United States Treasury Department: Money laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean." I have no idea if the $10m are proceeds of crime so we apply the duck test - "If it looks like a duck, quacks like a duck and swims like a duck; its probably a duck" A person has gifted another person $10m - there is nothing illegal about giving someone a gift, however, this is a pretty substantial gift. I am calling it a gift because there is no enforceable contract that requires repayment. There is an expectation that the receiver will invest this money for a period of time, hey, if I had $10m I'd probably invest it too. And then return it to the giver; with or without the earnings (you do not say). Again there is nothing wrong with reciprocating a gift; reciprocity is a cornerstone of most societies, however, this is a pretty detailed understanding of what reciprocity means. Quack, quack, quack - its money laundering. Many jurisdictions in the world have "unexplained wealth" laws which basically require a person to explain their unexplained wealth or have it confiscated. If it isn't money laundering it is certainly at risk of this.