Trust Creation and Validity

Question 1

Methods for Creating a Trust

Answer 1

A valid trust may be created by one of the following methods:

1. The declaration by a property owner that he holds the property as trustee.
2. A transfer of property during the owner’s lifetime to another as trustee.
3. A transfer of property by means of will taking effect upon the owner’s death (testamentary);
4. An exercise of a power of appointment to another person as a trustee.
5. An enforceable promise to create a trust.

Question 2

Requirements for a valid trust

Answer 2

1. Intent: The settlor must manifest an intent to create the trust
2. Property: Trust must have identifiable property.
3. Purpose: The trust must have a purpose that is not illegal or against public policy
4. Beneficiary: There must be an ascertainable beneficiary, unless it is a charitable trust or the selection of the beneficiary is left to the discretion of the trustee.
   Trustee need not be named; may be appointed by court.