TRUST CREATION

Question 1

Express Trust

Answer 1

An express trust is a legal device that allows an owner of property to make transfers of property in order to have those assets managed on behalf of someone else.

Question 2

What is needed for an express trust to be valid?

Answer 2

(8 REQUIREMENTS) For an express trust to be valid, there needs to be:
(1) a settlor (18+ with capacity to contract)
(2) who makes delivery of legal title
(3) of property (the res – not a mere expectancy of ownership in the future)
(4) to the Trustee, who holds legal title (court will appoint a trustee if there is no trustee or the trustee refuses to serve)
(5) for the benefit of a beneficiary (ascertainable and definite)
(6) with the intent of the settlor to create the trust (precatory language is not enough)
(7) for a lawful purpose (can’t be against public policy, ex: restricting marriage or promoting divorce)
(8) in a validly executed document.

Question 3

Simplified Rule Statement

Answer 3

An express trust is a created by a settlor, who makes delivery of legal title of property to the trustee, who holds legal title for the benefit of a beneficiary, with the intent of the settlor to create the trust for a lawful purpose in a validly executed document (must be in writing, signed by both settlor and trustee AND notarized or 2 witnesses).

Question 4

Two types of express trusts?

Answer 4

Lifetime: Made during the lifetime of the settlor
Testamentary: Set up in their will.