Trusts Law

Week 1 - Lecture 1

DEFINITION

● A Trust is an important equitable obligation which can be defined as “an arrangement

whereby the trustee holds legal title to property for the benefit of the beneficiaries.
The trustee has the burdens and beneficiaries have the benefits of property
ownership. The trustee is subject to fiduciary standards and may not use trust
property as his own.”
● OR “An equitable obligation, binding a person (who is called a trustee) to deal with
property over which he has control (which is called the trust property) either for the
benefit of persons (who are called the beneficiaries or cestuis que trust) of whom he
himself may be one, and any one of whom may enforce the obligation, or for a
charitable purpose, which may be enforced at the instance of the Attorney General,
or for some other purpose permitted by law but unenforceable.”

WHAT IS TRUST LAW

● Equity does not permit property to be accepted for a particular purpose and then
repudiated - BUT Trusts
● Trusts may arise in the context of wills of dispositions inter vivos
● May have a variety of forms (not just estates or money)
● Ex: when a person wishes for his own property go in succession to someone in
particular
● Basically it is vesting a property in a trustee for the benefit of others (distinguishing
feature of trusts)

REQUIREMENTS FOR THE CREATION OF A TRUST

● Title must pass irrevocably

● There must be legal title to the property (RES requirement)
● The property must be sufficiently s;pecific and identifiable
● Intent to create a trust
● Specific beneficiaries
● There must be a valid purpose

DIFFERENT TYPES OF TRUST

● Express Trusts: a trust created in express terms rather than one inferred by law.
● Secret Trusts: property is left to a person in a will as a trustee for an unnamed
beneficiary of the will
● Charitable Trusts: the great exception to the requirement that trusts must be for
specific, identifiable persons
● Purpose Trusts: trusts for purposes as distinct from individuals (ex museums, school
etc.)
● Constructive Trusts (imposed by law): Remedy imposed by a court to prevent unjust
enrichment
 ● Resulting Trusts: an equitable reversion where a trust fails or does not completely
disposes of the property. This is because it is presumed that the original owner of the
property did not intend to part with his property freely (so generous).

TERMINATING TRUSTS

● Beneficiaries can terminate a trust if all beneficiaries consent and there is no further
trust purpose to be served
● If there is a minor, disabled person etc. involved this may not be possible
● A spendthrift clause in trusts may make them indestructible