Express trust: Introduction to the requirements

Question 1

What is a self declaration of trust?

Answer 1

The settlor manifests an intention to hold one of the assets on trust for the beneficiary.
Once the trust has been created the settlor remains legal owner and forfeits their beneficial interest.

Question 2

What is a transfer on trust?

Answer 2

The settlor manifests an intention that the third party should hold the property on trust for the beneficiary or the settlor themselves.

Transfer on trust for…
a) A third party: the settlor parts with both legal and equitable interest.
b) The settlor: settlor changes to only beneficial.

Question 3

What are the 4 requirements of creating an express trust?

Answer 3

1. Three certainties:

a) Certainty of intention
b) Certainty of subject matter: Possible to ascertain the trust property and the beneficiary’s interest.
c) Certainty of objects; Possible to identify or ascertain the beneficiaries.

2. The beneficiary principle
   Requiring beneficiary’s of a trust to be legal persons.
3. Formalities for either…
   - inter vivos trust (self-declaration or transfer on trust)
   - Testamentary trust
4. Perpetuity rules

(All further explained in following chapters ok)