Creation and Requirements of an Express Trust

Question 1

What is an express trust?

Answer 1

It is a trust that has been intentionally created

Question 2

What two ways can a settlor create an expressed trust?

Answer 2

They can either:

• self-declare trust or
• transfer on trust

Question 3

What is required for a self-declaration of trust?

Answer 3

Requires the settlor to manifest an intention to hold one of their assets on trust for the beneficiary.

Question 4

What is required for transfer on trust?

Answer 4

Requires the settler to transfer property to a third party and to manifest an intention that the third party should hold the party on trust for the beneficiary

Question 5

What is the effect of self-declaration of trust?

Answer 5

Legal title remains with settlor as trustee.

New equitable interest is created for beneficiary.

Beneficial ownership transfer from settlor to beneficiary

Question 6

What is the effect of transfer on trust?

Answer 6

Legal title is transferred to a trustee.

New equitable interest is created for beneficiary.

Beneficial ownership transfer from settlor to beneficiary (if the settlor is the beneficiary, then it remains with them)

Question 7

What are the three certainties?

Answer 7

• certainty of intention
• certainty of subject matter
• certainty of objects

Question 8

What is certainty of intention?

Answer 8

Necessary to show that a trust arrangement is intended as opposed to some other arrangement relating to the property (eg gift or loan)

Question 9

What is certainty of subject matter?

Answer 9

Must be possible to identify or ascertain (i) the trust property and (ii) the beneficiary’s interest in the trust property

Question 10

What is certainty of objects?

Answer 10

Must be possible to identify or ascertain the beneficiaries of the trust

Question 11

What is the beneficiary principle?

Answer 11

There must be identifiable beneficiaries or objects to enforce the trust.

Objects of a trust must be legal persons.