An express trust is a fiduciary arrangement intentionally established by a settlor (also called grantor or trustor) who transfers legal title of property to one or more trustees to manage for the benefit of identified beneficiaries. It contrasts with trusts that arise by operation of law, such as resulting trusts and constructive trusts, which courts impose without any clear intention from the parties.
Under English common law and most common-law jurisdictions, an express trust requires the three certainties articulated by Lord Langdale in Knight v Knight (1840): certainty of intention (the settlor must clearly intend to create a trust, not merely express a wish), certainty of subject matter (the trust property must be identifiable), and certainty of objects (the beneficiaries must be ascertainable). Failure of any certainty typically voids the trust or causes the property to revert to the settlor's estate on resulting trust.
Express trusts may be created inter vivos (during the settlor's lifetime, often by a trust deed) or testamentary (by will, taking effect at death). They are widely used for estate planning, asset protection, charitable giving, pension schemes, and holding investment vehicles. Many jurisdictions impose formality requirements: in England, declarations of trust over land must be evidenced in writing under section 53(1)(b) of the Law of Property Act 1925.
For policy researchers and MUN delegates, express trusts matter in several international contexts:
- Beneficial ownership transparency: The Financial Action Task Force (FATF) Recommendation 25 requires states to ensure information on express trusts' settlors, trustees, and beneficiaries is accessible to competent authorities.
- Cross-border recognition: The Hague Convention on the Law Applicable to Trusts and on their Recognition (1985) governs choice of law for express trusts across signatory states.
- Anti-money-laundering: The EU's 5th Anti-Money Laundering Directive (2018) extended beneficial ownership registers to express trusts.
Civil-law jurisdictions historically lacked the trust concept but have adopted functional equivalents such as the French fiducie (2007) and the Liechtenstein Treuhänderschaft.
Example
In 2016, the Panama Papers leak revealed how wealthy individuals used express trusts in jurisdictions like the British Virgin Islands to hold assets while obscuring beneficial ownership from tax authorities.
Frequently asked questions
An express trust is created intentionally by a settlor's declaration, while a constructive trust is imposed by a court to remedy unjust enrichment or wrongdoing, regardless of any party's intent.
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