Creation of express trusts in English law

There are exceptions for statutory bodies and corporations, and minors who usually cannot hold property can, in some circumstances, create trusts.

To get around this, the courts have developed exceptions to this rule for situations when the settlor has done "all that he could do", the trustees or beneficiaries have acquired the property in a different way, or where the gift was made donatio mortis causa.

[1] Where a minor tries to create a trust, it will be held voidable, and can be repudiated by him when he reaches majority, or soon after.

[14] Ascertainability is where a beneficiary cannot be found,[15] and administrative unworkability arises when the nature of the trust is such that it cannot realistically be carried out.

For chattels, merely handing the property to the trustees is sufficient, assuming it comes with the relevant intention to create a trust.

In some circumstances, providing the intention and telling the trustees where to find the property is sufficient, as in Thomas v Times Books.

[19] One of the equitable maxims is that "equity will not assist a volunteer"; if someone does not have an interest in property, they cannot bring a court case.

[20] The courts are willing to hear cases where the transfer was not completed, providing the intended beneficiaries or trustees have gained an interest through being made executor of the settlor's estate (the rule in Strong v Bird), or the gift was given donatio mortis causa, or where the settlor did all he could do, as in Re Rose,[21] or where it would be "unconscionable" to hold the gift invalid, as in Pennington v Waine.

[24] For disposing of existing equitable interests, the Law of Property Act 1925 provides in Section 53(1)(c) that: (c) A disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or his agent thereunto lawfully authorised in writing or by will.

[26] Much of the debate in this area is over the definition of "disposition", and unsurprisingly almost all of the cases involve people trying to avoid tax.

[28] Under the rule established in Vandervell v IRC,[29] if the owner of a sole beneficial interest instructs his trustees to transfer the property, and this is done to transfer the beneficial interest and not simply to change the trustees, this does not fall under Section 53(1)(c) and requires no specific formalities.

[33][34] Where a beneficiary declares he is holding the property on behalf of another, this would be the creation of a sub-trust and not subject to specific formalities.