Trust 2 - Creation express trust

Question 1

What are the 2 essential rules for trusts?

Answer 1

1. Perpetuity: trust can’t last longer than 125 years
2. Rule in S v V beneficiaries can collapse a trust by trustees transferring legal title to them

Question 2

What two types of trusts arise by operation of law?

Answer 2

• Resulting - formalities of intended relationship not followed
• Constructive - result of wrong doing

Question 3

What are bare trusts?

Answer 3

Simply holding legal title

Question 4

What are the 2 methods of the transferor creating an express trust?

Answer 4

1. Self-declaration of trust: settlor becomes trustee, retaining legal title, holding their assets on trust for beneficiaries
2. Transfer on trust: settlor transfer legal title to 3rd party who holds on trust for beneficiaries

Question 5

What are the 4 requirements to create an express trust?

Answer 5

1. 3 Certainties
   - certainty of intention (creation)
   - certainty of subject matter (assets)
   - certainty of objects (bens)
2. Beneficiary Principles (must be identifiable beneficiaries save for exceptions)
3. Perpetuity Rules/Formalities (declaration & constitution of trust)
4. Registration