- Express trust
Where property is passed to a person but no gift is made, it is held for the owner, this is the
Resulting trust; where property should for some reason of public policy or fairness or rule of Equity be held for someone other than the legal owner, this is either the Statutory trustor the Constructive trust; but where legal title to property is held by someone on trust, this is the Express trust.
Law generally requires only a simple formality to create an express trust. In certain jurisdictions, an express trust may even be established orally. Typically, a settlor would record the disposition, where real property is to be held in trust or the value of property in trust is large. Where legal title to property is being passed to a trustee, a "deed of settlement" or "Trust Instrument" (for jurisdictions that do not recognise Deeds) may be used. Where property is to continue to be held by the person making the trust, a "declaration of trust" will be appropriate.
Often, a trust corporation or more than one trustee are appointed to allow for uninterrupted administration of the trust in the event of a trustee's resignation, death, bankruptcy or incapacity. Additionally a Protector may be appointed who, for example, is authorized to appoint new trustees and to review the trustees' annual accounts.
To be valid at common law, a trust instrument must ascertain its beneficiaries, as well as the res, or subject matter of the trust, unless it is a charitable trust which does not provide specific beneficiaries.
Common forms of express trust
Bare trust: property transferred to another to hold e.g. for a third person absolutely. May be of use where property is to be held and invested on behalf of a minor child or mentally incapacitated person.
; Life Interest trust: the income from property transferred is paid to one person "the life tenant" (e.g. a widow/er) during their lifetime and thereafter is transferred to another person (who may take absolutely or a second life interest according to the terms of the trust, in the second case a third beneficiary would come into play). The trustees may have power to pay capital as well as income to the life tenant; alternatively they may have rights to transfer ("appoint") property to other beneficiaries ahead of their entitlement.
Discretionary trust: the trustees may pay out income to whichever of the beneficiaries they, in the reasonable exercise of their discretion, think fit. They will normally also have a power to pay out capital. They may have extensive powers, even to add new beneficiaries, but such powers may normally only be exercised bona fide in the interests of the beneficiaries as a whole.
Charitable trusts: trusts for a purpose (as opposed to for individuals) are generally invalid at common law however charitiesare an exception. Persons wishing to pass money to causes not recognised as charitable may instead make gifts to established companiesor associations or may establish trusts or trust-like structures in jurisdictions which do not restrict non-charitable purpose trusts (e.g. Jersey trusts, Danish and US foundations and Liechtenstein Anstallts).
Protective trusts and Spendthrift trusts: can be established to provide an income for persons who cannot be trusted with it.
Variation of Trusts in English Law
The Variation of Trusts Act 1958 gave the courts the power to vary trusts in the following circumstances
· s1(1)(a) Any person having, directly or indirectly, an interest, whether vested or contingent, under the trusts who by reason of infancy or other incapacity is incapable of assenting; or
· s1(1)(b) Any person (whether ascertained or not) who may become entitled, directly or indirectly, to an interest under the trusts as being at a future date or on the happening of a future event a person of any specified description or a member of any specified class of persons, so however that this paragraph shall not include any person who would be of that description, or a member of that class, as the case may be, if the said date had fallen or the said event had happened at the date of the application to the court; or · s1(1)(c) Any person unborn; or
· s1(1)(d) Any person in respect of any discretionary interest of his under protective trusts where the interest of the principal beneficiary has not failed or determined.
The court does not have the power to consent to the variation of a trust on behalf of an ascertained individual who is sui juris.(Someone above the age of consent and of sound mind)
Forms of trust used by UK taxpayers
; Accumulation and Maintenance trust: A variation on the discretionary trust, the A&M does not carry the
Inheritance taxdisadvantages of a discretionary settlement but can only be established for persons under 25 who must be entitled to income at that age. Allows the accumulation of income within the trust until 25.
; Disabled Trust: Similar to an A&M trust but established for a disabled person.
; Reverter to Settlor trust: A trust where, on the death of the life tenant, the property reverts to the person making the gift.
; Nil Rate Band Discretionary trust: UK inheritance tax is payable at 40% on estates worth over £300,000 for the 2007-2008 tax year. If assets up to that value are placed in a discretionary trust during a person's lifetime, the trust will not be taken into account for inheritance tax if the person survives for a further 7 years. Likewise in a will, many persons leave a legacy on discretionary trusts so as to take full advantage of their nil rate band (gifts to spouses and registered civil partners being wholly exempt).
Forms of trust used by US persons
Certain US jurisdictions and other jurisdictions have developed a radically different interpretation of the trust. Valid trusts can be established by persons who then continue to deal with property as if it were their own during their lifetime, the trust crystallising on death. Trust funds can be taxed as legal entitles by election ("checking the box").
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Look at other dictionaries:
express trust — ➔ trust * * * express trust UK US noun [C] ► LAW a trust (= legal arrangement in which a person or organization controls another s assets) whose conditions are stated by the person making it, rather than being agreed by a legal process in a court … Financial and business terms
express trust — see trust Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary
express trust — noun a trust created by the free and deliberate act of the parties involved (usually on the basis of written documentation) • Syn: ↑direct trust • Hypernyms: ↑trust * * * noun Etymology: express (I) : a trust created dire … Useful english dictionary
express trust — A trust which arises out of a direct or positive declaration of trust. A trust that comes into existence by the execution of an intention to create it by the person having legal and equitable dominion over the property made subject to it. 54 Am… … Ballentine's law dictionary
trustee of express trust — A trustee duly appointed or designated, as distinguished from a trustee de son tort or a trustee under a constructive trust. The term includes a person with whom, or in whose name, a contract is made for the benefit of another. Muncie Natural Gas … Ballentine's law dictionary
trust — n 1 a: a fiduciary relationship in which one party holds legal title to another s property for the benefit of a party who holds equitable title to the property b: an entity resulting from the establishment of such a relationship see also… … Law dictionary
Trust law in England and Wales — is the original and foundational law of trusts in the world, and a unique contribution of English law to the legal system. Trusts are part of the law of property, and arise where one person (a settlor ) gives assets (e.g. some land) to another… … Wikipedia
express — ex·press 1 adj: directly and distinctly stated or expressed rather than implied or left to inference compare implied express 2 vt: to make known (one s thoughts, ideas, or opinions) by words, conduct, or symbols see also expression M … Law dictionary
trust — A legal entity created by a grantor for the benefit of designated beneficiaries under the laws of the state and the valid trust instrument. The trustee holds a fiduciary responsibility to manage the trust s corpus assets and income for the… … Black's law dictionary
Trust law — In common law legal systems, a trust is an arrangement whereby property (including real, tangible and intangible) is managed by one person (or persons, or organizations) for the benefit of another. A trust is created by a settlor, who entrusts… … Wikipedia