Business, Legal & Accounting Glossary
The express trust is the archetypal form of trust, and the one most commonly meant when the term ‘trust’ is used. An express trust is created intentionally by a person exercising his powers of ownership. The person who creates an express trust is usually referred to as the settlor, even when the trust is not strictly a settlement. Express trusts are typically created in the form of a written document, the ‘trust instrument’.
The settlor may make the trust gratuitously, or else as part of some arrangement. For instance, a person who expresses in his will the desire to create a trust for the benefit of his children is doing so freely and not (usually) as part of some deal. On the other hand, occupational pension trusts are held by employers as trustees and are generally part of an agreement in the form of a contract of employment.
The settlor can, and often will maintain a measure of control of the trust assets by means of the terms of the trust instrument. For example, he may reserve the right to replace the trustees or to have a say in the allocation of the trust’s benefits. In extreme cases, the settlor may include express terms allowing the trust to be revoked. These terms are effective because they form part of an agreement between the settlor and the trustees, not because the settlor retains any rights of ownership over the settled assets.
In general, an express trust will be either a fixed trust or a discretionary trust. A trustee of either of trust-type may also be granted a power of appointment, as may anybody else. It is not at all uncommon, for instance, for one of the beneficiaries to be granted a power of appointment.
See also discretionary trust, fixed trust, power of appointment.
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This glossary post was last updated: 6th April, 2020 | 56 Views.