Nature and classification of trusts

The nature of trusts

There is no single agreed definition of a trust, but one that has been accepted by the courts is:

'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.'

Classification of trusts

There is no generally agreed classification of trusts. However, it is possible to make distinctions according to:

1. •

   mode of creation

2. •

   validity and enforceability

3. •

   whether private or public

4. •

   tax treatment

The traditional generic categorisation of trusts distinguishes between those that are express, implied, constructive or resulting.

Express trusts are:

1. •

   created by the terms of an inter vivos or lifetime settlement, declaration or other trust instrument or by Will or codicil, or

2. •

   expressly imposed by statute

Implied trusts may be express