The law recognizes several kinds of trusts. Two types of trusts the law recognizes are express trusts and resulting trusts. The main difference between the two trusts is in how they are created. An express trust is intentionally created, while a resulting trust is not. An express trust is created intentionally and purposefully.
Express trusts must satisfy a series of requirements to be valid. These include:. The settlor must have the legal capacity to create a trust at the time of creation. Legal capacity means that the settlor must be of sound mind. In contrast, a resulting trust, also called an implied trust, is a trust that is created by operation of the law.
A court will find that a resulting trust exists when an individual has attempted to create an express trust, but the express trust either fails, or the trust does not use or exhaust all of the trust assets. The law recognizes a specific type of resulting trust known as a purchase money trust. This kind of trust arises when one person buys and pays for property. Then, the purchaser requests that the seller deliver the deed to the purchaser with the name of a third person on the deed.
The purchaser and the third person are not related. The resulting trust is that is created is known as a purchase money resulting trust. The trust is held by the third person, for the purchaser. The decision quotes extensively from Waters on Trusts In Canada. As Waters put it at p There is no need for any technical words or expressions for the creation of the trust. Tags: gifts , resulting trust , trusts , unjust enrichment Categories: Resulting Trust Claims.
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In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Lawyer Directory. Call us at 1 Creation of an Express Trust Express trusts are created by a settlor, who transfers property to a trustee for a valid trust purpose.
The following definitions elaborate on the essential components of an express trust: The Settlor. The settlor, also known as the grantor or trustor, is the person who creates the trust and transfers trust property. Trust Property. Any type of property, real or personal, tangible or intangible, may serve as trust property. The Trustee.
A trustee maintains the trust property and makes distributions to the beneficiary according to the terms of the trust. A trustee may be a person or a legal entity. The trustee owes a fiduciary duty to the beneficiary, which includes protecting trust property, investing prudently, and making proper distributions. The Beneficiary. The beneficiary to a trust is the person who benefits from the trust property. A beneficiary may be a single person, a group of people, an organization, or a pet.
The beneficiary need not be in existence at the time the trust is created. Trust Purpose. A trust must have a valid purpose.
A valid purpose is defined as any legal purpose. Trusts are most commonly created to provide for support, education, asset protection, tax planning or to contribute to a charity. Types of Express Trusts Express trusts may take a number of different forms. Living Trusts. A living trust, or inter vivos trust, is created for the benefit of another during the settlor's life.
Testamentary Trusts.
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