DEFINITION & CLASSIFICATION

- A trust is an equitable obligation, binding a person (trustee) to deal with property over which he
has controlled (trust property) for the benefit of persons (beneficiaries a.k.a. cestui que trust) of
whom he himself may be one and any one of whom may enforce the obligation.

- If the trustee breach the trust, only the beneficiaries have right to sue the trustee.

Parties to a trust

1) Settlor / Testator
 Must declare an intention to create the trust. Verbal declaration as good as written
declaration.
 Must transfer the trust property to the trustee

- the transfer must be posses legal transfer according to the relevant law

- once trust property becomes completely constituted trust, the owner have no ownership.

2) Trustee
 the person who is under the obligation to hold the trust property for the benefit of the
beneficiaries. It is also possible for trustees to be beneficiaries as well under the same trust.
3) Beneficiaries
 the persons who are entitled to the enjoyment of the trust property.

Types of Trust

1. Express Trust – express intention of the settlor to create a trust

2. Resulting trust / implied trust – affect when settlor set up a trust but failed / results / returns to
the settlor.
3. Constructive trust - – these trusts are imposed by the courts in response to fraudulent or
unconscionable conduct. A constructive trust may arise if property is transferred as the result of
an individual exerting undue influence over another. (impose to that person whether he like it or
not as penalty).
4. Statutory trust – are those trusts which arise under statute.