Trusts Essay

420 WordsJan 3, 20112 Pages
A trust may be constituted formally by execution of a trust deed or informally through conduct. In either event, certain conditions must be satisfied. In order for a valid trust to be constituted, legal title in the trust property must be transferred to trustees. ”There must be an unequivocal intention on the part of the settler to create a trust.” In Richards v Delbridge two methods were established which will make a trust perfectly constituted. “One may either do such acts as to amount in law to a conveyance or assignment of the property, and thus completely divest himself of legal title. The legal owner of the property may; by one or other of the modes which is recognised as amounting to a valid declaration of trust, constitute himself a trustee and, without an actual transfer of the legal title.” Until recently, an intended settler who did not achieve either of these factors achieved nothing. It was established in Milroy v Lord that “there must be an effective transfer of the property.” Thus an imperfect gift will not be perfected simply by interpreting the donor to be a trustee of the property which is the subject matter of that gift, nor will an incompletely constituted trust be rendered effective so as to aid a volunteer. Turner LJ expressed this principle in terms that for a settlement to be effective “the settler must have done everything which according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him”. It is alleged that there are exceptions to this requirement but these may be distinguished by arguing that they are not so much exceptions as further formal ways in which a trust can come into being. In Jones v Lock it was stated “Where the settler declares himself as a trustee, a formal transfer of a legal ownership is not required”. In

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