This document provides an introduction to trust law, explaining the concept of a trust as a legal arrangement where one party holds rights for the benefit of another. It describes the roles of the settlor, trustee, and beneficiary, as well as different types of trusts such as express, resulting, and constructive trusts. The document also contrasts trusts with agency and contract relationships, highlighting their unique legal obligations and characteristics.

1. INTRODUCTION TO TRUST LAW

2. WHAT IS A TRUST?
A trust is a device where
certain rights, are held by
one person for the benefit of
another.

3. PARTIES TO A TRUST
Settlor – The person creating the
Trust
Trustee – The person holding the
rights
Beneficiary/ Object – person or
persons for whom those rights
are held
Settlor
Legal Title
Trustee
Beneficiary
Equitable Title
Fiduciary Obligation

4. WHY CREATE A
TRUST?
Beneficiary maybe incapable of
managing rights (Child)
For charities
For privacy (ex; Secret Trusts)
To create commercial arrangements
To create employee trusts

5. JUDICIAL EFFECT OF A TRUST
 The rights which the settlor had prior to the creation of the trust are
transferred in their entirety to the trustee. At the same time, new rights
are created in equity for the beneficiary of the trust.
 Before the trust was created the settlor held the rights outright.
DKLR HOLDING CO (N0 2) LTD V COMMISSIONER OF STAMP
DUTIES (1982)

6. TYPES OF TRUSTS
Express – these are trusts
created in accordance with
the express intention of the
settlor. This intention may be
expressed orally or in writing
or affirmed by the conduct of
the parties
Resulting – these are trusts
that arise in accordance with
the implied intention of the
transferor or where a transfer
of property fails or does not
exhaust the entire property
Constructive – these are trusts
created by the courts in the
interests of justice and
conscience;
Fixed trusts – these are trusts
that are created by the
settlor in which the benefici-
aries and their interests are
ascertained or are
ascertainable on the date of
the creation
Discretionary trusts – these
are express trusts whereby
the settlor has imposed an
obligation on the trustees to
exercise their discretion in
favour of a class of objects

7. TRUSTS AND
OTHER
RELATIONSHIPS
Agency
An agent may owe similar duties to the principal as a
trustee owes to the beneficiaries of the trust.
However, in an agency relationship, the principal
retains both legal and beneficial ownership of
property. A trustee must have legal title to property.
An agent is subject to direction by the principal. A
trustee is not subject to direction by the beneficiaries.
An agency relationship normally ends upon the death
of either party. A trust is not terminated by death.

8. Contract
A contract is a common law obligation while a trust is an equitable
obligation.
A contract arises from agreement between the parties while a trust
may arise without agreement between the parties Ex; Constructive
trust
In a contract only parties to the contract can sue (privity of
contract) but in a trust a party who is not part of the settlement I.e.
beneficiary can sue.