Chapter 1: Introduction

Question 1

What is a trust?

Answer 1

A fiduciary relationship where the trustee holds legal title to property for the benefit of the beneficiaries who hold equitable title

Question 2

Who is the settlor?

Answer 2

The person who creates the trust

Question 3

What is an express trust?

Answer 3

A trust created by the express intentions of the settlor

Question 4

When can an express trust be created?

Answer 4

During the settlor’s life (inter vivos) or in their will (testamentary)

Question 5

What are the two types of express trust?

Answer 5

1. Private trusts
2. Charitable trusts

Question 6

What are the three types of private trust?

Answer 6

1. Fixed trusts (settlor defines interests of beneficiary)
2. Discretionary trusts (trustee given discretion on how to distribute trust property
3. Purpose trusts e.g. the maintenance of an animal

Question 7

What is a charitable trust?

Answer 7

A charitable trust for the benefit of an indefinite class

E.g. Providing scholarship funds to needy students

Question 8

What is an implied trust?

Answer 8

Where the intention of the settlor has not been expressed, but a trust is implied in equity to ensure that an equitable result is reached

Question 9

What are the two categories of implied trust?

Answer 9

1. Resulting
2. Constructive

Question 10

When may a resulting trust arise?

Answer 10

1. An interest under an express trust fails
2. An express trust does not exhaust the beneficial interest
3. A person makes a voluntary purchase or transfer in another’s name

Question 11

What is a constructive trust?

Answer 11

A constructive trust is an equitable remedy to prevent the unjust enrichment of one party at the expense of another as a result of wrongful conduct such as fraud or undue influence