Express trusts

An express trust is a trust created "in express terms, and usually in writing, as distinguished from one inferred by the law from the conduct or dealings of the parties." Property is transferred by a person (called a trustor, settlor, or grantor) to a transferee (called the trustee), who holds the property for the benefit of one or more persons, called beneficiaries. The trustee may distribute the property, or the income from that property, to the beneficiaries. Express trusts are frequently used in common law jurisdictions as methods of wealth preservation or enhancement.

Law generally requires only a simple formality to create an express trust. In certain jurisdictions, an express trust may even be established orally. Typically, a settlor would record the disposition, where real property is to be held in trust or the value of property in trust is large. Where legal title to property is being passed to a trustee, a "deed of settlement" or "Trust Instrument" (for jurisdictions that do not recognise Deeds) may be used. Where property is to continue to be held by the person making the trust, a "declaration of trust" will be appropriate.

Often, a trust corporation or more than one trustee is appointed to allow for uninterrupted administration of the trust in the event of a trustee's resignation, death, bankruptcy or incapacity. Additionally a Protector may be appointed who, for example, is authorized to appoint new trustees and to review the trustees' annual accounts.

To be valid at common law, a trust instrument must ascertain its beneficiaries, as well as the res (a Latin term meaning "thing") or subject matter of the trust, unless it is a charitable trust which does not provide specific beneficiaries.

To be valid in equity, a trust must satisfy the following elements: 1. Property or rights of a kind which can be the subject of a trust 2. A declaration of trust or disposition on trust by a person legally competent to create a trust 3. Certainty of property and objects (trust must be administratively workable 4. Compliance with requirements regarding evidence 5. Compliance with rule against remoteness of vesting (rule against perpetuities and rule against inalienability of income for longer than the perpetuity period)

The Variation of Trusts Act 1958 gave the courts the power to vary trusts in the following circumstances

The court does not have the power to consent to the variation of a trust on behalf of an ascertained individual who is sui juris.(Someone above the age of consent and of sound mind)

Certain US jurisdictions and other jurisdictions have developed a radically different interpretation of the trust. Valid trusts can be established by persons who then continue to deal with property as if it were their own during their lifetime, the trust crystallising on death. Trust funds can be taxed as legal entities by election ("checking the box").

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Wikipedia