Business, Legal & Accounting Glossary
Property that a settlor expects to acquire but does not yet own. Any attempt to create a trust of future property will, in theory, fail. This is because a trust can never be constituted where the settlor has no title to transfer (i.e. to the trustee).
However, an existing equitable interest, so long as it is a vested interest, can be the subject matter of a trust even if its owner is entitled to no present benefit. For example, an individual with an interest in remainder in some land parcel may create a trust of that interest, even though he presently receives no benefit. It is, in fact, precisely this scenario that should have unfolded in Re Ralli’s Will Trust (1964). Here the settlor failed to convey her life interest into the trust as covenanted, most likely because no one had realized that such an interest was capable of being conveyed.
Although one can’t create a trust of future property, one can enter into a covenant to constitute a trust with this subject matter once it becomes available. A covenant of this sort may even be enforceable by the intended beneficiaries in certain circumstances (see, e.g., the constitution of trusts).
For related discussions see the constitution of trusts, Re Ellenborough (1903), Re Ralli’s Will Trust (1964).
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Future Property are sourced/syndicated and enhanced from:
This glossary post was last updated: 6th April, 2020 | 181 Views.