Formalities for the creation of trusts

Question 1

What does inter vivos mean?

Answer 1

It the lifetime of the settlor

Question 2

What formalities are required for the creation of trusts of personalty?

Answer 2

There are no special formalities

Question 3

What formalities are required for the creation of trusts of realty?

Answer 3

• evidence in writing
• signed by the settlor

Question 4

Does the non-compliance of the formalities for trusts of realty render the trust void?

Answer 4

No but the trust is unenforceable

Question 5

Can a trust be made by a will?

Answer 5

Yes. The will has to be validly executed and if so it would be automatic compliance of formalities

Question 6

Can a beneficiary of a trust transfer their equitable interest to another?

Answer 6

Only if the formality requirements of s53(1)(c) have been met:
- the disposition is of a subsisting equitable interest
- required to be in writing
- can be signed by an agent if written authorisation give
- can be trusts of personalty or realty

Question 7

What is a subsisting equitable interest?

Answer 7

An equitable interest that has already been separated from the legal title

Question 8

How can the equitable interest of trust property be disposed of by the beneficiary in favour of a third party?

Answer 8

By one of four ways:
1. assign to a third party directly
2. direct the trustees to hold the property for a third person
3. contract for valuable consideration to assign the equitable interest
4. declare oneself a trustee of such an interest

Question 9

How does the beneficiary assign to a third party directly?

Answer 9

They must comply with s53(1)(c) otherwise it is void - in writing and signed