ABSTRACT

A trust is similar to a range of legal relationships. Hence, it is important to determine that a settlor intended to create a trust. In order to do this, it is important to appreciate the differences between trusts and other analogous relationships. If a settlor does not expressly set out that he or she intended to create a trust, any number of interrelated legal relationships may arise. A brief overview of the legal relationships usually associated with the trust follows.

Where a trust is created or established, the trustee will automatically acquire fiduciary obligations towards the beneficiary; this is a consequence of the special relationship of trust and confidence between a trustee and beneficiary and the need to protect the beneficiary against the possibility of abuse by the trustee. It is important to understand, however, that not every fiduciary relationship will constitute a trust. Fiduciary relationships may be imposed wherever a relationship of trust and confidence exists, and there remains the possibility that one party will take advantage of that trust and confidence. Such a relationship naturally arises where a trust is created, but it can also arise in other circumstances. Where a person is a fiduciary without being a trustee, only personal equitable obligations will be created.