An express trust is a type of trust where a person (settlor) expressly decides or intends to create a trust, usually in writing.
There are five essential requirements for creating a legally valid express trust. These requirements are discussed briefly as follows:
Capacity:
The person who intends to create an express trust should have the legal capacity to deal with property. This means that a person intending to create an express trust should have reached the age of majority and should have the mental capacity to understand the nature and effect of transfer of property. The age of majority is different in the different provinces of Canada. In British Columbia, the age of majority of a person is 19 years. A corporation in Canada can also create an express trust subject to the provisions of the statute governing the corporation and its constating documents.
Three Certainties:
An express trust should satisfy the following three certainties:
- Certainty of intention: A person wanting to create an express trust must make the intentions to create a trust clear. Though the use of word “trust” is not mandatory but its highly recommended to meet this requirement. In the case of Antle v Canada, the court held that the words alone are not enough to establish the intentions. The Court will look into the surrounding evidence to confirm that the person intended to create an express trust.
- Certainty of subject matter: The property that the person intends to transfer to the trustee(s) must be clearly defined. The subject matter of the trust (property) should be described and identified.
- Certainty of objects: The objects for which the person intends to create a trust must be defined so the trustee(s) can know how to deal with the trust property.
Constitution:
The trust property must be transferred by the person intending to create the trust into the hands of the trustee(s).
Formalities:
The formalities for the creation of the trust must be satisfied. For example, to create a valid testamentary trust in British Columbia, the requirements of WESA statute must be complied with.
Public Policy:
A trust must not be created for an illegal purpose or should not be contrary to a public policy.
If you would like to consider the possibility creating an express trust as part of your business structure or estate plan, our lawyers at Cassady Law LLP would be happy to discuss with you how creating an express trust may assist you in meeting your objectives.
Disclaimer
Disclaimer: The information in this article (“Article”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this Article should be construed as legal advice from Cassady Law LLP or the author.
