Free tool · Equity and Trusts
Is It a Valid Trust? The Three Certainties
An express trust is valid if the settlor had capacity, clearly intended to impose a duty on a trustee to hold identified property for beneficiaries who can be ascertained (or for a charitable purpose), and the purpose is lawful. These are the three certainties: intention, subject matter and objects. A hope or wish (‘I hope you will look after my sister’) is not enough, a trust of an expected inheritance fails, and a trust for an indefinite private class fails. A lifetime trust must be funded, and a trust of land needs a signed writing. A trust does not fail because no trustee is named, since a court will appoint one. If the trust fails, the property may pass as a gift or return on a resulting trust. Answer the questions to see how a trust fares.
Tool · Is It a Valid Trust?
A valid express trust appears to have been created.
Capacity: The settlor had capacity to create a trust (the capacity required to make a will for a testamentary trust, or to make a contract or gift for a lifetime trust).
Intention: Certainty of intention: the settlor clearly intended to impose a duty on the trustee to hold the property for the beneficiaries. No particular words are needed, and the word ‘trust’ is not required.
Trust property: Certainty of subject matter: the trust property is existing and identified.
Beneficiaries: Certainty of objects: the beneficiaries are identified or can be ascertained, so that someone can enforce the trust.
Trustee: A trustee is named.
Lawful purpose: The purpose is lawful and not against public policy.
Funding: The property was transferred to the trustee, or the settlor declared themself trustee of identified property, so the trust is constituted.
Writing: A lifetime trust of personal property can be created orally, though it is hard to prove, and a writing is the norm.
Tests whether an express trust was validly created: capacity, the three certainties (intention, subject matter and beneficiaries), a lawful purpose and the formalities for a lifetime trust or a trust by will. If it fails, it says what the law falls back on (an outright gift, a resulting trust or a constructive trust). Simplified general American rules (the Restatement and the Uniform Trust Code); states differ. A teaching aid with invented facts, not legal advice. Runs in your browser; nothing is stored or sent.
How to use it
- Say what the settlor’s words showed, and what the trust property is.
- Say who the beneficiaries are, and whether the purpose is lawful.
- Say whether it was created in life or by will, and whether it was funded.
- Read each requirement, and what happens if the trust fails.
Common questions
What are the three certainties of a trust?
Certainty of intention, certainty of subject matter (the trust property) and certainty of objects (the beneficiaries).
Does a trust fail if no trustee is named?
No. The court will appoint a trustee rather than let the trust fail.
What is a resulting trust?
If an express trust fails, or does not use up all the property, the property is held on a resulting trust for the settlor or the settlor’s estate.
Learn the law behind the tool
This tool is part of our Equity and Trusts course, with lectures, concept maps, flashcards, interactive exercises and a capstone case. Equity and Trusts: Trust Creation and Essential Elements.
More free law tools
General information, simplified, mainly on American law, not legal advice. States and countries differ, and real cases turn on facts that a tool cannot capture.