Re Keen [1937] 1 Ch 236 (CA)

Facts

• The case concerns the validity of a half-secret trust, where the will referred to a trust but did not fully disclose its terms.
• The testator delivered a sealed letter containing details of the trust's beneficiaries to the trustees before death.
• Clause 5 of the will instructed the trustees to dispose of funds as “may be notified by me to them or either of them during my lifetime”.
• The key question was whether the requirements for communication and creation of the trust, as dictated by case law and the Wills Act, were met.
• The Court of Appeal examined whether the method of communication (sealed letter) and the implied timing of instructions were sufficient to create a valid half-secret trust.

Issues

1. Whether a sealed letter delivering details of a half-secret trust's beneficiaries fulfilled the requirement of proper communication to the trustees.
2. Whether a half-secret trust is valid if the terms are communicated after the execution of the will, rather than before.
3. Whether the trust in Re Keen could be re-characterised as a fully secret trust if it failed as a half-secret trust.

Decision

• The Court of Appeal found that the method of notification—a sealed letter—could constitute a valid mode of communicating trust terms.
• However, the trust failed because the reference in the will suggested notification of terms could occur in the future, i.e., after execution of the will.
• The court held that for a half-secret trust to be valid, both its terms and creation must be communicated prior to the execution of the will.
• The proposed trust was declared void for attempting to create the trust after the will's execution, contravening statutory requirements.
• The possibility of recharacterising the arrangement as a fully secret trust was considered and rejected based on the explicit reference to a trust in the will.

Legal Principles

• A half-secret trust must have its terms communicated to and accepted by the trustees prior to the execution of the will.
• Communication of trust terms via a sealed letter may suffice, provided the timing requirement is met.
• Attempts to establish a trust by post-execution notification are ineffective and void under the Wills Act.
• The distinction between half-secret and fully secret trusts is critical: half-secret trusts require disclosure in the will and pre-execution communication, while fully secret trusts allow for private communication and no mention of the trust in the will.
• Authority from Blackwell v Blackwell [1929] AC 318 was central, establishing the need for pre-will creation and communication for half-secret trusts.

Conclusion

Re Keen [1937] 1 Ch 236 (CA) confirms that half-secret trusts are only valid if fully created and communicated prior to will execution. Post-execution communication renders such trusts void, underlining strict statutory compliance for testamentary dispositions and highlighting the critical distinction between half-secret and fully secret trusts.