Trusts: Creation of Trusts

What is an express trust?

A trust which is intentionally created and arises from a person's intention to create it. It can be private or public.

What are resulting and constructive trusts?

Trusts imposed by the courts and also known as implied trusts.

What is a self-declaration of trust?

Settlor retains legal title to trust property but holds in capacity as trustee for third party.

What is a transfer on trust (for third party)?

Settlor transfers legal title to a trustee. Trustee holds the property on trust for the beneficiary who is the equitable and beneficial owner.

What is a transfer on trust (for settlor)?

Settlor changes from being the full legal owner to have an equitable and beneficial owner.

What three certainties are required for an express trust?

1. Certainty of intention

2. Certainty of subject matter

3. Certainty of objects

What is the beneficiary principle?

The general rule that a trust must have a beneficiary.

What are the formalities of an express trust?

Declaration of the trust (creation of the beneficiary's interest) and constitution of the trust (transfer of legal title to the trustee)

What is the Online Trusts Registration Service?

If a private express trust has occured a tax liability it needs to be registered.

What trusts arise under the operation of law?

1. Resulting trusts

2. Constructive trusts

3. Statutory trusts

What is a resulting trust?

When a legal owner has transferred ownership to a third party of their property but equity recognises that they should retain or regain the beneficial interests in that property.

What is an automatic resulting trust?

Default trust when a transfer on trust fails either wholly or partly.

What is a presumed resulting trust?

Arise in response to a transfer of title. There is a presumption that the legal owner of the property holds it for the benefit of another person.

What is a constructive trust?

Arose where it would be unconscionable for a person who legally holds the title of an asset to deny another person's beneficial interest in that asset.

What is an institutional constructive trust?

Arise because the conscious of the legal owner is affected in some way preventing them from denying the beneficial interest of another person.

How is a constructive trust used as as remedy?

Awarded by the court following misapplication of a property in which the claimant can establish an equitable, proprietary interest or property representing the traceable proceeds with a breach of trust or fiduciary duty.

What is a common intention constructive trust?

Used to resolve disputes about the beneficial ownership of land where there is no express trust declared over that land.