Express trusts

Writing

An express trust can be created orally or by a written instrument. However, if the trust property is real estate, the declaration of trust must be in writing.

Certainty

To be valid, an express trust must satisfy three tests of certainty. These are:

• • certainty of intention (to create a trust);
• • certainty of subject matter. For a trust to validly exist there must be trust property; and
• • certainty of beneficiaries.

Variation

An express trust can be varied in a number of ways:

• • pursuant to powers contained in the trust instrument. Most trust deeds permit variation of the trust powers but prescribe certain procedures to be followed or consents to be obtained in order to do so;
• • through the inherent jurisdiction of the courts. These circumstances are quite limited; and
• • through the power to vary conferred on the court by statute. A number of such powers are conferred by the state and territory Trustee Acts to assist in management or administration of trusts.

Termination

The maximum life of a trust is limited by the perpetuity period. In most states the maximum life of a trust is 80 years. The perpetuity period time limit has been abolished in South Australia. In almost every modern trust, the trust can be terminated at any earlier time by either the trustee or the appointor (or both).

Beneficiaries can bring a trust to an end, if they are all over 18 and beneficially entitled to the whole of the trust property.

See Express trusts.