Secret Trusts have been used to conceal gifts on death from public scrutiny.

When someone dies, a Grant of Probate (if obtained) makes that person’s will a public document, available for public scrutiny. Originally, Secret Trusts were used for mistresses and illegitimate children and consist of two types: Fully Secret Trusts and Half Secret Trusts.

A Fully Secret Trust is where on the face of the will the gift in the will is an absolute gift but in reality the beneficiary is not entitled to the gift but is holding it on trust for the true beneficiary. As the trust does not appear on the face of the will, the public are unaware of the true beneficiary. For example: A has an illegitimate child Z, of which A's wife has no knowledge. A wishes to leave £50,000 to Z but if the gift were mentioned in the will this would cause upset to A's wife. Therefore, before making his will, A obtains his sister B's agreement that if A leaves £50,000 to B in the will, B will hold it on trust for Z.

For a Fully Secret Trust to be valid there must be evidence of the trust. There must be a binding obligation imposed on the secret trustee to carry out the testator's wishes. The fact of the trust and it's terms must be communicated to the secret trustee before the testator dies. Acceptance of the trust by the secret trustee must also take place.

Half Secret Trusts are where the testator leaves property to a person as trustee on the face of the will but the true beneficiary/ies are secret, i.e. the testator has transferred property to X 'as trustee for the purposes communicated to him'

For a Half Secret Trust to be valid the following must apply: 

1. The terms of trust must be communicated to the trustee;
2. Communication must be made before or at the same time as making the will;
3. Acceptance by the trustee must be before or at the same time as the making of the will.

Contact Emma Waters on 01245 453833 or emma.waters@birkettlong.co.uk