Nature and classification of trusts—the nature and classification of trusts
Nature and classification of trusts—the nature and classification of trusts

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Nature and classification of trusts—the nature and classification of trusts
  • Nature of trusts
  • The trust concept
  • Definition
  • What is not a trust
  • Components of a trust
  • Trusts contrasted with other relationships
  • Forms of classification of trusts
  • Classification according to creation
  • Distinction between valid and enforceable trusts and valid but unenforceable trusts
  • More...

Nature and classification of trusts—the nature and classification of trusts

Nature of trusts

The trust concept

Typically, the settlor is the original owner of property and creates a trust by conveying it to one or more trustees and manifesting an intention that it is to be held on trust for one or more beneficiaries or for the accomplishment of a particular purpose. The trustees become owners at common law and hold the property or rights in trust for the beneficiaries (cestuis que trust) or that purpose. The trustees come under an equitable obligation enforceable by the beneficiaries. No trust is created, whatever the intention of the settlor, unless legal title is vested in the trustee (this is known as constituting the trust).

Definition

While the trust concept is recognisable, a definition is not so easy.

The definition set out in The Law of Trusts and Trustees 10th edition by Underhill and Hayton was adopted by the Court of Appeal in Green v Russell per Romer LJ:

'A trust is 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), for the benefit of persons (who are called the beneficiaries or, in old cases, cestuis que trust), of whom he may himself be one, and any one of whom may enforce the obligation.'

However, this definition

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