Introduction to Trusts Law

At their heart trusts are simply a way of more than one person owning property. It has been suggested that they originate from knights who went on crusades in the 12th century. Within a trust there is a settlor who commences the trust and originally has absolute ownership. Ownership then splits between a trustee who takes legal title and a beneficiary who takes an equitable interest. There are three different types of trust: express, resulting and constructive trusts. Express trusts are set out in agreements. Resulting trusts are implied by the court where either the beneficiaries are not clearly defined by an agreement or where a contribution has been made towards the purchase price of property. Constructive trusts exist in order to prevent wrongdoing and abuse of the fiduciary duty. The different formats of a trust are bare trusts and fixed trusts (for a set number of beneficiaries) and discretionary trusts where the trustee has an active role in making decisions based on an uncertain future. Trusts are used in a variety of situations such as wills, in business and even for tax avoidance purposes. They have played a significant role in popular culture in books such as Pride and Prejudice by Jane Austen, Bleak House by Charles Dickens and Pamela by Samuel Richardson.