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Express trusts

 
An express trust is where the legal owner(s) of the property declare that they hold the property on trust for specified beneficiaries. The declaration will also set out the proportion or ways in which they are to hold beneficial interest (eg as joint tenants or tenants in common). Where there is an express declaration, this will override the principles of resulting or constructive trusts unless the declaration was obtained by fraud or mistake.
 

 
 
Pankhania v Chandegra [2012] EWCA Civ 1438  Case summary
 
 
Requirements to create an express trust


i) An intention to create a trust


The legal owner must make it clear that they intend to hold the land for the benefit of another. 
 
 
Richards v Delbridge (1874) LR 18 Eq 11 Case summary
 
Re Kayford [1975] 1 WLR 279  Case summary
 
Paul v Constance [1977] 1 WLR 527  Case summary
 
 
ii) Declaration must be evidenced in writing
 

S.53(1)(b) Law of Property Act 1925 requires the declaration of trust to be evidenced in writing and signed by the person declaring the trust. The written declaration  must contain the material terms of the trust:
 
 
Smith v Matthews (1861) 3 De GF & J 139  Case summary
 
 
However, see the rule established in Rochefoucauld v Boustead:
 
 
Rochefoucauld v Boustead [1897] 1 Ch 196  Case summary

 
The court may refer to extrinsic evidence to establish the terms:


Iles v Iles [2012] EWHC 919 Case summary
 
 
 
iii) Transfer of legal title to the trustee
 
This requirement only applies where the legal owner intends to create an express trust by transferring the legal title to a third party. In such circumstances the declaration itself is not sufficient to create a trust, but the express trust will only come into existence where the transfer of the legal title is complete by registration or the moment that the transferee has done all in his power to transfer the legal title to the transferor.
 

Mascall v Mascall (1984) 50 P & CR 119  Case summary
 
 
iv) The trust must not offend the rule of perpetuity

See further:

Perpetuities and Accumulations Act 2009  - applies to instruments created after April 6th 2010

Perpetuities and Accumulations Act 1964 - applies to instruments created between July 1964 and April 6th 2010
 
 
 

Express trusts in Land Law