Chapter 1 - Express Trusts: Declaration of Trusts
17 November 2025 12:32
WHAT IS A TRUST? KEY PARTIES
• A trust is an equitable obligation binding a 1. Settlor
person (trustee) to deal with property over Creates the trust and transfers
which they have control for the benefit of property into it.
beneficiaries or for a specific purpose. 2. Trustee
• It divides the rights in property into: Holds legal title and manages
○ Legal title (held by trustee), and trust property.
○ Equitable/beneficial interest (held by 3. Beneficiary
beneficiary). Holds equitable title and can
• Trustees owe fiduciary duties and must enforce trustee duties.
administer property according to the trust
terms.
Express Trusts Resulting Trusts
• Intentionally created by settlor. • Arise automatically where:
• Can be: ○ The settlor failed to
○ Inter vivos (during lifetime) dispose of whole
○ Testamentary (through a will) beneficial interest; or
• Must satisfy: ○ Property is transferred
○ Three Certainties (Knight v Knight) without consideration →
1. Certainty of intention presumption of resulting
2. Certainty of subject matter trust.
3. Certainty of objects/beneficiaries
Constructive Trusts
Fixed Trusts • Imposed by the court (not
• Beneficiaries and their respective shares created deliberately).
certain from outset. • Typically arise in:
○ Breach of fiduciary duty,
○ Unconscionability,
▪ Joint family assets,
○ Unauthorised profits by
fiduciaries.
Discretionary Trusts Purpose Trusts (Non-charitable)
• Trustees decide: • Generally invalid unless:
○ Which beneficiaries receive property, ○ They fit exceptions (e.g.
○ How much and when. maintenance of graves,
• Beneficiaries have a mere hope/expectation animals).
until trustees exercise discretion. • Charitable purpose trusts valid
if meet Charities Act criteria.
WHY USE TRUSTS? FIDUCIARY NATURE OF A TRUST
Management of Wealth • Trustees are fiduciaries and
• Separates ownership from enjoyment. must:
• Useful for vulnerable beneficiaries, minors, tax ○ Act honestly and in good
planning. faith.
Continuity Trusts survive death of settlor → used in ○ Avoid conflicts of
wills for ongoing provision. interest.
Asset Protection Not profit from their
Trusts Page 1
,Asset Protection ○ Not profit from their
Assets held by trustees, not beneficiaries → position (unless
protection from: authorised).
○ Creditors, ○ Exercise reasonable skill
○ Divorce, and care (statutory s.1
○ Bankruptcy (subject to rules). Trustee Act 2000 for
Commercial Uses professional trustees).
• Pension funds,
• Unit trusts, • Beneficiaries can:
• Security arrangements, ○ Enforce obligations in
• Corporate structures. equity,
○ Seek remedies including:
▪ Injunctions,
▪ Accounting,
▪ Removal of trustee,
▪ Compensation for
breach.
1.6 TRUST PROPERTY
• Trust property may include:
○ Land,
○ Money,
○ Shares,
○ Chattels,
○ Any recognisable form of property.
• Trustee responsibilities include:
○ Segregation of trust property,
○ Proper investment (per Trustee Act 2000),
○ Keeping accurate accounts.
1.7 CONSTITUTION OF TRUSTS
A trust must be properly constituted to be enforceable.
Constitution by Transfer Milroy v Lord Principles Exceptions /
Settlor must transfer property to trustee • Settlor must: Relaxations
using correct legal formalities: 1. Transfer legal title, • Re
• Land → deed, or Rose:
• Shares → stock transfer form + 2. Declare a trust, or trust
registration, 3. Use correct mode effecti
• Chattels → physical delivery, for the property ve
• Cheques → delivery + encashment, class. when
• Equity does not “perfect an imperfect • If they fail → no trust. transfe
gift”. ror has
done
“every
thing
in their
power
”.
• Pennin
gton v
Waine:
Trusts Page 2
, Waine:
uncons
cionabi
lity
may
perfect
incom
plete
gifts
(contro
versial)
.
1.8 CERTAINTIES (KNIGHT v KNIGHT)
1. Certainty of Intention 2. Certainty of Subject Matter 3. Certainty of Objects
• Must clearly intend • Trust property must be • Must identify
to create a trust. identifiable. beneficiaries OR
• Words like “trust”, • Beneficial shares must be define class clearly.
“confidence”, “hold clear. Fixed Trusts Test
for” help — but • Problems arise with: • Complete list test: All
substance matters. ○ Part of a larger bulk beneficiaries must be
• Precatory wording (e.g., “5% of my identifiable.
(e.g., “wish”, “hope”) shares”) • There needs to be
normally = no trust ○ Unidentifiable chattels evidential certainty, if
unless context shows (“one bottle from my a full list cant be
obligation. wine collection”) drawn the trust fails
Discretionary Trusts Test
• Is or Is Not test
(McPhail v Doulton):
Court must decide
whether any person is
or is not within the
class.
• Administrative
unworkability may
defeat trust if class is
too large (“all London
residents”).
1.9 FORMALITIES
1.9.1 Disposition of Equitable Interests (s.53 LPA 1925)
• s.53(1)(b): Declaration of trust of land must be in signed writing.
• s.53(1)(c): Disposition of existing equitable interest must be in writing.
• s.53(2): Resulting, constructive, implied trusts exempt from formalities.
Trusts Page 3
, Chapter 2 - Express Trusts: Constitution of Trusts
18 November 2025 11:51
2. Constitution of Express Trusts
2.1 Introduction
To create a valid and enforceable express trust, the settlor must complete two steps:
(a) Valid declaration of trust
• Must comply with requirements in Chapter 1 (certainty of intention, subject matter,
and objects + any required formalities such as signed writing for land).
(b) Proper constitution of the trust
• The settlor must put the assets into the trust.
• This requires either:
○ Declaring themselves trustee, OR
○ Transferring legal title to a third-party trustee.
Constituted vs. not constituted
• Constituted trust:
– Both declaration + transfer complete.
– Settlor cannot change their mind.
• Not constituted:
– No trust exists; settlor remains absolute owner.
Two methods of constituting an inter vivos (lifetime) trust
1. Settlor declares themselves trustee
→ Only a declaration is needed; no transfer.
2. Settlor appoints someone else as trustee
→ Declaration plus transfer of legal title to the trustee.
2.2 Settlor Declares Themselves Trustee
When the settlor declares themselves trustee:
• They already hold legal title.
• A valid declaration of trust immediately constitutes the trust.
• Nothing further is required—no transfer formalities.
Before declaration: Settlor holds legal + equitable title.
After declaration:
• Settlor becomes trustee, holding legal title.
• Beneficiary obtains equitable interest.
→ Trust is constituted immediately once the declaration is valid.
2.3 Settlor Appoints a Third Party as Trustee
If someone else is to be trustee:
• A valid declaration is not enough.
• The settlor must transfer legal title to the trustee.
• Transfer requirements depend on the type of property.
2.3.1 Land
To transfer legal title to land to a trustee, the settlor must:
(a) Execute a deed (LPA 1925, s 52)
A valid deed satisfies LP(MP)A 1989, s 1:
1. The document states it is a deed (or is signed "as a deed")
2. Signed by the settlor
Trusts Page 4
17 November 2025 12:32
WHAT IS A TRUST? KEY PARTIES
• A trust is an equitable obligation binding a 1. Settlor
person (trustee) to deal with property over Creates the trust and transfers
which they have control for the benefit of property into it.
beneficiaries or for a specific purpose. 2. Trustee
• It divides the rights in property into: Holds legal title and manages
○ Legal title (held by trustee), and trust property.
○ Equitable/beneficial interest (held by 3. Beneficiary
beneficiary). Holds equitable title and can
• Trustees owe fiduciary duties and must enforce trustee duties.
administer property according to the trust
terms.
Express Trusts Resulting Trusts
• Intentionally created by settlor. • Arise automatically where:
• Can be: ○ The settlor failed to
○ Inter vivos (during lifetime) dispose of whole
○ Testamentary (through a will) beneficial interest; or
• Must satisfy: ○ Property is transferred
○ Three Certainties (Knight v Knight) without consideration →
1. Certainty of intention presumption of resulting
2. Certainty of subject matter trust.
3. Certainty of objects/beneficiaries
Constructive Trusts
Fixed Trusts • Imposed by the court (not
• Beneficiaries and their respective shares created deliberately).
certain from outset. • Typically arise in:
○ Breach of fiduciary duty,
○ Unconscionability,
▪ Joint family assets,
○ Unauthorised profits by
fiduciaries.
Discretionary Trusts Purpose Trusts (Non-charitable)
• Trustees decide: • Generally invalid unless:
○ Which beneficiaries receive property, ○ They fit exceptions (e.g.
○ How much and when. maintenance of graves,
• Beneficiaries have a mere hope/expectation animals).
until trustees exercise discretion. • Charitable purpose trusts valid
if meet Charities Act criteria.
WHY USE TRUSTS? FIDUCIARY NATURE OF A TRUST
Management of Wealth • Trustees are fiduciaries and
• Separates ownership from enjoyment. must:
• Useful for vulnerable beneficiaries, minors, tax ○ Act honestly and in good
planning. faith.
Continuity Trusts survive death of settlor → used in ○ Avoid conflicts of
wills for ongoing provision. interest.
Asset Protection Not profit from their
Trusts Page 1
,Asset Protection ○ Not profit from their
Assets held by trustees, not beneficiaries → position (unless
protection from: authorised).
○ Creditors, ○ Exercise reasonable skill
○ Divorce, and care (statutory s.1
○ Bankruptcy (subject to rules). Trustee Act 2000 for
Commercial Uses professional trustees).
• Pension funds,
• Unit trusts, • Beneficiaries can:
• Security arrangements, ○ Enforce obligations in
• Corporate structures. equity,
○ Seek remedies including:
▪ Injunctions,
▪ Accounting,
▪ Removal of trustee,
▪ Compensation for
breach.
1.6 TRUST PROPERTY
• Trust property may include:
○ Land,
○ Money,
○ Shares,
○ Chattels,
○ Any recognisable form of property.
• Trustee responsibilities include:
○ Segregation of trust property,
○ Proper investment (per Trustee Act 2000),
○ Keeping accurate accounts.
1.7 CONSTITUTION OF TRUSTS
A trust must be properly constituted to be enforceable.
Constitution by Transfer Milroy v Lord Principles Exceptions /
Settlor must transfer property to trustee • Settlor must: Relaxations
using correct legal formalities: 1. Transfer legal title, • Re
• Land → deed, or Rose:
• Shares → stock transfer form + 2. Declare a trust, or trust
registration, 3. Use correct mode effecti
• Chattels → physical delivery, for the property ve
• Cheques → delivery + encashment, class. when
• Equity does not “perfect an imperfect • If they fail → no trust. transfe
gift”. ror has
done
“every
thing
in their
power
”.
• Pennin
gton v
Waine:
Trusts Page 2
, Waine:
uncons
cionabi
lity
may
perfect
incom
plete
gifts
(contro
versial)
.
1.8 CERTAINTIES (KNIGHT v KNIGHT)
1. Certainty of Intention 2. Certainty of Subject Matter 3. Certainty of Objects
• Must clearly intend • Trust property must be • Must identify
to create a trust. identifiable. beneficiaries OR
• Words like “trust”, • Beneficial shares must be define class clearly.
“confidence”, “hold clear. Fixed Trusts Test
for” help — but • Problems arise with: • Complete list test: All
substance matters. ○ Part of a larger bulk beneficiaries must be
• Precatory wording (e.g., “5% of my identifiable.
(e.g., “wish”, “hope”) shares”) • There needs to be
normally = no trust ○ Unidentifiable chattels evidential certainty, if
unless context shows (“one bottle from my a full list cant be
obligation. wine collection”) drawn the trust fails
Discretionary Trusts Test
• Is or Is Not test
(McPhail v Doulton):
Court must decide
whether any person is
or is not within the
class.
• Administrative
unworkability may
defeat trust if class is
too large (“all London
residents”).
1.9 FORMALITIES
1.9.1 Disposition of Equitable Interests (s.53 LPA 1925)
• s.53(1)(b): Declaration of trust of land must be in signed writing.
• s.53(1)(c): Disposition of existing equitable interest must be in writing.
• s.53(2): Resulting, constructive, implied trusts exempt from formalities.
Trusts Page 3
, Chapter 2 - Express Trusts: Constitution of Trusts
18 November 2025 11:51
2. Constitution of Express Trusts
2.1 Introduction
To create a valid and enforceable express trust, the settlor must complete two steps:
(a) Valid declaration of trust
• Must comply with requirements in Chapter 1 (certainty of intention, subject matter,
and objects + any required formalities such as signed writing for land).
(b) Proper constitution of the trust
• The settlor must put the assets into the trust.
• This requires either:
○ Declaring themselves trustee, OR
○ Transferring legal title to a third-party trustee.
Constituted vs. not constituted
• Constituted trust:
– Both declaration + transfer complete.
– Settlor cannot change their mind.
• Not constituted:
– No trust exists; settlor remains absolute owner.
Two methods of constituting an inter vivos (lifetime) trust
1. Settlor declares themselves trustee
→ Only a declaration is needed; no transfer.
2. Settlor appoints someone else as trustee
→ Declaration plus transfer of legal title to the trustee.
2.2 Settlor Declares Themselves Trustee
When the settlor declares themselves trustee:
• They already hold legal title.
• A valid declaration of trust immediately constitutes the trust.
• Nothing further is required—no transfer formalities.
Before declaration: Settlor holds legal + equitable title.
After declaration:
• Settlor becomes trustee, holding legal title.
• Beneficiary obtains equitable interest.
→ Trust is constituted immediately once the declaration is valid.
2.3 Settlor Appoints a Third Party as Trustee
If someone else is to be trustee:
• A valid declaration is not enough.
• The settlor must transfer legal title to the trustee.
• Transfer requirements depend on the type of property.
2.3.1 Land
To transfer legal title to land to a trustee, the settlor must:
(a) Execute a deed (LPA 1925, s 52)
A valid deed satisfies LP(MP)A 1989, s 1:
1. The document states it is a deed (or is signed "as a deed")
2. Signed by the settlor
Trusts Page 4
