The general principle of creating an express trust comes from Turner LJ in Milroy v Lord [1862] where it was stated that there must be a valid declaration of trust and also that the legal title must pass to the trustee.
Another general principle is that the settlor must have a proprietary right in the property they are establishing a trust over as per
Windeyer J in Norman v Federal Commissioner of Taxation [1963]. A person also cannot create a trust over property they will have a proprietary interest in in the future as per Re Brooks’ ST [1939]. There is an exception to this principle in cases of estoppel.
Once a trust has been created it cannot be undone by a settlor as per Paul v Paul [1882]. However the power to revoke a trust can be included in the trust instrument though this itself has tax implications. On the other hand beneficiaries can both enforce and revoke a trust as per Saunders v Vautier [1841].
In more specific examples a trust over personal property requires no formalities (M’Fadden v Jenkyns [1842]). This means they can be created orally (Paul v Constance [1977]) or even inferred by the courts (Re Kayford [1975]). The only exception is for shares that do have to be registered in the name of the trustee.
Trusts over land are normally created by way of a deed but in general they have to be completed in writing and signed by the settlor as per s. 53(1)(b) of the Law of Property Act 1925. All of the terms of the contract have to be included in one document as per s. 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Trusts of land are governed by the Trusts of Land and Appointment of Trustees Act 1996.
Under s. 9 of the Wills Act 1837 a Will must be:
in writing
signed by the testator
signed/attested by two or more witnesses
An important exception from s. 53(2) of the Law of Property Act 1925 is that resulting, implied and constructive trusts do not require formalities.
The courts may also allow exceptions in cases of fraud or unconscionability (Rochefoucauld v Boustead [1897]).
