THE DECLARATION OF TRUST is the trust instrument that constitutes the trust. It has been noted in trust law that no technical expressions are required to create a valid declaration, so long as the words used make clear the settlor’s intent to create the trust or confer a benefit of some sort that would be best carried out in the form of a trust. A trust instrument doesn’t necessarily need to be a declaration either, for a trust may be, and often is, formed out of a simple agreement or even a will. But with an Express Trust, the declaration has been preferred since the beginnings of trusts under the common law of England, which otherwise shunned fictions of law. This is where careful attention to detail is most crucial, because in order to properly construe the intent of the settlor, the objects, property, and manner in which all is to be carried out must be set forth in unambiguous, precise language so as to particularly create the Express Trust; and where the intent of the settlor is unclear, under equity, interpretation is required to construe the intent of the parties, and the trust may be deemed invalid, depending on the degree of ambiguity.18 However, when all is done properly, obviously, there can be no lawful impairment of the obligations of contract. Moreover, the declaration, by its terms and provisions, serves to establish the entire contractual arrangement, including the identities and positions of the parties, the trust’s name, jurisdiction and situs, and all particulars of administration, all of which the courts of equity will fully support by the principle that equity compels performance. The ultimate result is the creation of a bona fide legal entity with its own separate and distinct juridical personality; with standing to sue and be sued, and to function as a person in commerce by and through its trustee(s). The term natural person has been applied to Express Trusts by courts of equity because of its administration, being carried out by men acting as natural persons.Under this application, the trust’s right of contract is alienable, whereas its creators’ natural right of contract obviously is not.25 The Express Trust nevertheless possesses, inter alia, the right to all enjoyments stemming from the contracts into which it enters, as well as all the obligations imposed under such contracts. The Express Trust possesses the ability to hold/own property, engage in business transactions, and incur liabilities (including tax liabilities) as well as assume creditorship (including secured party status), like any other legal person.
Posted on: Fri, 28 Nov 2014 01:48:15 +0000
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