Creation of Trusts 2023

CREATION OF TRUSTS
 Capacity to Create Trusts

• There is no special capacity required to create a Trust except that anyone who has the
mental and physical capacity or right to convey or transfer property can create a trust
in relation to that property.
• A Settlor must thus be of a sound mind and of the required age of majority.
• A Trust need not take a particular form and therefore the word ‘trust’ need not be
used.
 Formalities for Creating a Trust
• Where the trust relates to movable property there is no need for writing and it can be
created orally.
• Where however the subject matter of the trust is immovable property then sections
S33,34 & 35 of the Land Act 2020, Act 1036 must be complied with since it involves a
conveyance of land unless exempted under section 36
 There are however three formal basic requirements for the creation of a trust which
requirements are known as the Certainties of Trusts.
• These requirements of certainties only apply to express trust and are irrelevant under
 Certainties of Trusts: These are
• Certainty of Intention/words,
• Certainty of Subject matter and
• Certainty of Objects- Knight v Knight (1840) 49 E.R. 58 .
• The absence of any of these will not create an express trust.
 Certainty of Words and Intention
• Although no particular words are required, the settlor or testator must use words
which clearly show an intention to create a trust.
• The Courts have held that an obligation or duty must be imposed on the person in
whom the legal interest is vested to use the property for the benefit of others. Thus if
the words used simply indicate a wish, desire or preference by the settlor for the
person holding the legal interest to use the property for certain ends, then a trust will
not be said to have been created.
• The trust must be created by clear mandatory words and not leave the legal interest
holder with any discretion.
• Where the words used are precatory or an admonition, the transferee/trustee may
hold both the legal and equitable interest and a trust is not created. Re Adams and
Kensington Vestry 1884 27 Ch. D. 394, Gyesi v Quagraine [1963] 2 GLR 161, Sey v Sey [1963] 2 GLR 220
 Certainty of Subject Matter
• This relates to the subject of the trust and the interest in the subject matter. The
particular property known as corpus for the trust must be sufficiently described
otherwise no trust can be created.
• There must also be a sufficient quantum of interest in the corpus (property) which
should be held in trust, whether a freehold, leasehold or life interest.
• Where the corpus has been identified without the sufficient quantum and it
involves an immovable property, the rights and interest of the transferor/settlor is
what shall pass unless a contrary intention applies. Nemo dat so no greater
interest shall pass than the settlor’s.
• Vague descriptions of the property and interests are thus unacceptable. In the
Estate of Last [1958] P. 137.
• Where a trust fails due to lack of certainty of subject matter and then the
holder/trustee is to hold the property in resulting trust for the settlor. Re Clarke
[1923] 2 Ch. 407
• Where the corpus has been clearly identified without the interest of each of the
beneficiaries, equity is equality or equality is equity and each of the beneficiaries
will have an equal share.
 Certainty of Objects
• Beneficiaries of the trust must be clearly identifiable.

• The beneficiaries need not be natural beings but could be non-humans or
artificial beings.
• If there are no persons whose benefit the trust is created then there is no trust.
Re Wood [1949] Ch. 498 . The courts are strict on this and therefore if the
beneficiaries are unascertainable then there is no valid trust. In Re Vandervell’s
Trust No 2 1974 Ch. 269 at 319 Lord Denning said, ‘It is clear law that a trust
(other than a charitable trust) must be for ascertainable beneficiaries.’
• Where there are no ascertainable beneficiaries the trustee holds the trust in
resulting trust for the settlor. Re Carville [1937] 4 All E.R. 464, Mamavi v. West
Africa Building Ltd [1965] GLR 216
 Note: A Trust may also usually be created by Wills and has to comply with
S33,34, 35 of the Land Act 2020 if it is immovable property by being in writing
and signed by the testator except under privileged or Armed Forces Wills.
In Soon Boon Seo v. Gateway Worship Centre [2008-2009] 1GLR 21, the Supreme Court held that:
“A trust could be express or implied, i.e. resulting or constructive. An express trust required the
three certainties of intention, subject matter and objects to be valid. On the other hand, the
essential ingredients of a constructive trusts were: (a) there had to be no express intention of the
parties to create a trust; (b) there had to be in existence a fiduciary relationship; and (c) the
fiduciary relationship had to specifically be in the context of trust such as to make the fiduciary a
trustee in equity. The facts of the instant case did not support the creation of an express trust, but
they clearly supported the creation of a constructive or implied trust because even though the
appellant was not an express trustee, he kept the funds donated in Korea for the benefit of the
second respondent church in his own bank account as the legal title owner. He therefore stood in a
fiduciary position because he became a nominal owner or controller of something which did not
belong to him, and which he had collected in the name of the respondent church . Accordingly, since
on the evidence' a completely constituted trust had been created and the appellant held the funds he
had raised in Korea on a constructive trust for the second respondent church, the trust was valid and
enforceable.”
 Legal Effect of absence of any of the Certainties
• All the three certainties must be present and the absence of one will cast doubts
on the other and thus invalidate an express Trust.
• Where this happens a resulting trust is created in favour of the settlor. Missouri
Bank v Rayner (1882) 7 App. Cases 321
 Secret Trusts –This arises where there is a trust document which does not disclose
a trust on the face of it.
• Normally this is created in a Will and the recipient of the property may be kept
entirely secret by not being disclosed in the will.
• It is used by persons to create a trust for people whose identity they wish to
conceal. For instance mistresses and children born out of wedlock. As such instead
of leaving a property by a will directly to such a person the settlor leaves it with a
trusted friend such that on the face of the will it does not show the identity of the
beneficiary but in reality it has been agreed that it would be passed on to the
unrevealed beneficiary. Blackwell v Blackwell [1929] AC 318.
 Types of Secret Trusts: A trust may be fully secret or half-secret.
 Fully Secret Trusts
• A trust is said to be fully secret when the trust document on the face of it does not
create a trust but there is simply a conveyance. However there is a second document
which indicates that the transferee is to hold the property in trust for the benefit of
others with reference to the terms of the trust.
• Where the trust is fully secret and it is being created by a Will then the legatee or
devisee holding it in trust must be communicated to before the death of the testator.
• If the intention to create a trust is not communicated to him before the death of the
testator then no trust is created and he will hold it in resulting trust in favour of the
Settlor/Testator’s Estate. Boyes v. Carritt 1884 26 Ch. D. 531
 Half Secret Trusts
 A half secret trust is distinct from a fully secret trust.
• With half secret trusts, the instrument indicates that there is a trust but
the terms of the trust do not fully or sufficiently appear on the trust
instrument or the will.
• It may be that the trustee is not named and details and particulars of the
trust are also left out.
• This may create its own problems as the devisee trustee may use his
discretion to decide the terms of the trust and at what point should the
trust take effect.
• It is thus prudent that the particulars must be communicated to the

trustee devisee before the death of the testator.
PUBLIC TRUSTS (Popularly called Charitable Trusts)
 This is a kind of trust whose object is the public welfare and not a particular
private individual or persons. The beneficiaries are the general public though
it may confer incidental benefit on a private individual/person.
 What is most important is the meaning of the word “Charity”. Commissioner

of Income Tax v. Pensel [1891] A.C.531.
 A Charitable Trust must fall into at least one of these categories or purposes.
 Charity – Something for relief of poverty, incapacitation or age
 Advancement of education
 Advancement of religion
 Omnibus of any other purpose beneficial for the charity not falling under 1-3.
 Care of orphans and advancement of health and benefit to community
See National Anti-Vivisection Society v. Inland Revenue Commissioner [1948] A.C
496
Nature of Public/Charitable Trusts
By virtue of their nature ,

• The beneficiaries are the general public
• Their income or profits are generally except in few cases, exempt from
income tax.
• They are usually enforced by the AG
• They are not affected by the rule against perpetuity
• They cannot fail by virtue of lack of any of the certainties provided the
trust shows that the intention is to devote the property to charity.
 Exception: Cases are to the effect that where the object of a trust is
political or involves campaigning for the change of the government/law of
the community, such a trust is not a charitable trust.

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CREATION OF TRUSTS

 Capacity to Create Trusts

• Beneficiaries of the trust must be clearly identifiable.

 Fully Secret Trusts

 A half secret trust is distinct from a fully secret trust.

• It is thus prudent that the particulars must be communicated to the

 What is most important is the meaning of the word “Charity”. Commissioner

By virtue of their nature ,

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