Modes of creating an express trust

A trust is perfectly created when the trust property is ‘at home’, that is, the trustees have acquired the property subject to the terms of the trust as declared by the settlor. There are two modes of creating an express trust: (a) The settlor may transfer property to third party trustees subject to the

terms of the trust as declared by the settlor. Thus, the settlor will be required to effect the trust in two stages. One stage imposes on the settlor the obligation to transfer the property to the trustees and the settlor fulfils his obligations. The other stage requires the settlor to declare the terms of the trust, that is, to comply with the three certainties test (see below). The settlor may be one of the trustees and/or one of the beneficiaries. As the author of the trust he is required to identify the trustees and beneficiaries. It must follow that both these requirements or stages are complementary. A transfer of property to another without a declaration of trust, will be construed as nothing more than a gift in favour of the transferee, and a declaration of trust executed with the intention of making a third party a trustee for another will be of no effect if the third party has not acquired the property. For example, S, the legal and equitable owner of land wishes to make T1 and T2 trustees of the property for the benefit of B, his nephew. S will have to transfer the legal title to T1 and T2 and declare the terms of the trust in favour of B. On completion of these requirements B will acquire an equitable interest in the land.