express trust

The express trust is a trust which has been expressly and intentionally declared by its creator, known as the settlor or in the case of a trust created by will, the creator known as the testator. Express private trust is one created by the unilateral act of the donor, settlor or testator and not an implied or a resulting trust.

The requirements for the valid creation of an express trust are as follows:

• a. The settlor must be mentally competent to declare a trust.
• b. The settlor make clear his intention to declare a trust.
• c. The settlor must identify the trust property and the beneficial shares.
• d. The settlor must identify the beneficiaries.
• e. The settlor must, where necessary, validly transfer the trust property to trustees.
• f. The settlor must, where necessary, comply with any requirements as to formality.

Any person who has the capacity to own any particular form of property has the capacity to create a trust and also to hold such property on trust because the capacity to hold interest in property is sufficiently connected to the power to create a trust. However there are four categories of persons whose ability to create a trust is not absolute. The persons are:

• a. An infant cannot be the legal owner of a land and therefore cannot create a trust of a legal estate in land. An infant, also cannot, unless either a soldier on active service or mariner at sea, make a valid will. Therefore an infant cannot normally create a valid trust by will. It follows from the above that an infant cannot create a trust of real property or create a valid will except such an infant is a soldier at war or mariners at sea. An infant can however create a trust over both legal and equitable interest in pure personality and over equitable interest only in real property.
• b. People with mental disability also cannot validly create or have a trust enforced directly against them, since their mental deficiency may itself encumber their ability to validly dispose their properties or make will. Re Beaney (1978) 1 W.L.R. 770.
• c. Incorporated companies only have those powers which are granted to them in their memoranda of association or which are reasonably incidental to the carrying on of their business. A declaration of trust by a corporation may thus be ultra vires. However, incorporated companies can create trusts if the power to do is provided for in the memorandum and articles of association.
• d. Statutory bodies and incorporated companies are in a similar position, the capacity will depend upon the provisions of the enabling statute creating such statutory body. Statutory bodies can create trusts if the power to do so is contained in their enabling law, otherwise any trust created will be declared ultra vires.

The general rule is that anyone who can be the legal owner of property can also be the beneficiary under a trust. The following persons can be beneficiaries under a trust:

• a. Infants, though cannot hold legal estate in land, can be beneficiaries of a trust.
• b. Aliens can be beneficiaries of trust in any property.
• c. Trustees can also be beneficiaries of a trust but no trust exists where one person is the sole owner in law and equity of the property in question. Therefore, a sole beneficiary lacks the capacity to be sole trustee of the trust of which he is also the sole beneficiary. If the legal estate is transferred to him, the trust will disappear.