Mastering Equity and Trusts: A UK Law Student’s Guide

Equity is a body of legal principles that developed historically to correct the rigidity of the common law and to act on a defendant’s conscience. Trusts are equity’s most important creation: a trust arises where one party (the trustee) holds legal title to property but must use it for the benefit of others (the beneficiaries), on terms set by the person who created it (the settlor).

So Equity and Trusts as a module covers two linked things: the wider principles and remedies of equity, and the detailed law of trusts — how they are created, run and enforced. It is a demanding subject because the rules are precise and heavily case-based. This guide is general educational information about UK law, not legal advice; always verify the current law against primary sources and your own module materials, and if you need help with a live assignment our law assignment help explains what UK markers expect.

The common law was administered by the royal courts, but its remedies (mainly damages) and strict procedure could produce unfair results. Litigants petitioned the Court of Chancery, where the Lord Chancellor decided according to conscience and developed equity. Where the two conflicted, equity prevailed — confirmed in the Earl of Oxford’s Case (1615).

The Judicature Acts 1873–1875 fused the administration of law and equity into a single court system (a point continued today by s49 of the Senior Courts Act 1981), but they did not fuse the two bodies of rules themselves — equity and common law remain conceptually distinct. Understanding this relationship is essential, because many exam questions turn on where a strict legal rule gives way to an equitable one.

Equity is guided by maxims — short principles that capture how it operates. They are not rigid rules, but they explain many outcomes and are useful signposts in an answer:

• Equity will not suffer a wrong to be without a remedy.
• He who comes to equity must come with clean hands.
• Equity looks to the intent rather than the form.
• Equity will not assist a volunteer (someone who has given no consideration).
• Equity will not perfect an imperfect gift.
• Equity acts in personam (against the conscience of the defendant).
• Delay defeats equity (the doctrine of laches).

Equitable remedies (such as injunctions and specific performance) are discretionary, which is why these maxims matter: they shape whether a court will grant relief.

Even a certain trust must be properly constituted — the property must actually be vested in the trustee, or the settlor must have declared themselves trustee. Milroy v Lord (1862) sets out the modes of transfer and the principle that equity will not perfect an imperfect gift or assist a volunteer. Later cases soften this: Re Rose treats a transfer as effective once the settlor has done everything in their power, and Pennington v Waine allowed a transfer where it would be unconscionable to recall it.

Formalities can also apply. Under the Law of Property Act 1925, a declaration of trust respecting land must be evidenced in signed writing (s53(1)(b)), and a disposition of a subsisting equitable interest must be in writing (s53(1)(c)). Testamentary trusts must comply with the Wills Act 1837. Missing a required formality can invalidate an otherwise well-intentioned trust.

Trustees hold significant powers (for example over investment and, sometimes, distribution) but are bound by strict duties. The Trustee Act 2000 imposes a statutory duty of care and a general power of investment subject to the standard investment criteria and a duty to review. Trustees must also act impartially between beneficiaries and keep proper accounts.

Above all, a trustee is a fiduciary. As Millett LJ explained in Bristol and West Building Society v Mothew, the distinguishing obligation is one of loyalty. That yields the no-conflict rule (Keech v Sandford) and the no-profit rule (Boardman v Phipps): a fiduciary must not allow duty and interest to conflict, nor profit from the position without authority. These duties are demanding precisely because they protect beneficiaries who cannot supervise every decision.

A breach of trust occurs when a trustee fails in a duty — for example by making an unauthorised investment or distribution. A beneficiary may seek a personal remedy (an account, or compensation to restore the fund) or a proprietary remedy against the misapplied property or its substitute.

Tracing is the process of identifying trust property as it changes form; equitable tracing traditionally requires a fiduciary relationship (Re Diplock), and Foskett v McKeown confirms a beneficiary can claim the traceable proceeds or a proportionate share. Equity’s wider remedies — injunctions, specific performance, rescission, rectification and account of profits — are all discretionary. Proprietary estoppel, though distinct from trusts, often appears alongside them: where a clear assurance is relied on to the claimant’s detriment, equity may intervene (Thorner v Major; Gillett v Holt).

Problem questions reward a disciplined method — IRAC (Issue, Rule, Application, Conclusion) or ILAC. Identify each legal issue on the facts, state the relevant equitable rule and authority, apply it to those specific facts, then reach a reasoned conclusion. Work issue by issue; do not simply write everything you know about trusts. A structured way to start is to understand exactly what the question asks before you plan.

A short fictional example. Aisha tells her friend Ben, “this £5,000 in my account is as much yours as mine, for when you need it,” then dies. Her executors claim the money.

• Issue — did Aisha create a valid express trust of the £5,000 for Ben?
• Rule/principle — an express trust needs the three certainties; certainty of intention can be shown by informal words, without technical language.
• Authority — in Paul v Constance similar words were held to demonstrate an intention to create a trust.
• Application — Aisha’s words closely echo that case; the subject matter (£5,000) and object (Ben) are certain, so intention is the live issue.
• Conclusion — a court could find a valid trust, so the money is held for Ben rather than forming part of the estate — though the outcome turns on the full facts and evidence.

This example is illustrative only; never reproduce or submit a live assessed question, and keep your own analysis your own work.

An essay question is different: it argues a position rather than applying law to facts. Analyse the exact question and command word, set out a clear thesis, then build each paragraph around an authority — a case or statute — that you explain, apply and critically evaluate rather than merely describe. Weigh competing academic views and counterarguments, and link every paragraph back to your argument. Our step-by-step guide to writing a UK law essay covers this in depth.

Use cases and legislation critically: note the level of court — up to the UK Supreme Court — whether a decision is binding or persuasive, and how later cases have treated it. Read the full judgments and statutes for yourself using free primary sources such as BAILII for case law and legislation.gov.uk for statutes, rather than relying on summaries. Reference everything in OSCOLA, using footnotes and a bibliography — the official Oxford OSCOLA guidance is the authority on format. Reading widely also helps: our guide to the hardest law-school courses explains the study habits that make dense modules manageable.

The most common mistakes are avoidable once you know them:

• Describing the law instead of applying it to the specific facts.
• Naming cases without explaining the principle or why it fits.
• Confusing resulting and constructive trusts, or the objects tests for fixed and discretionary trusts.
• Ignoring formalities and constitution when a trust otherwise looks valid.
• Treating equitable remedies as automatic rather than discretionary.
• Weak or inconsistent OSCOLA referencing, which loses easy marks.