An express trust is a legal trust created intentionally by the owner of property to provide specific instructions for its use. It can be in the form of a written will, oral statement, or legal document. Examples include spendthrift, discretionary, charitable, and naked trusts. It is important to register an express trust as laws regarding oral statements vary in different countries.
An express trust is a type of trust created intentionally by the owner of property to provide specific instructions for the use of that property for one or more specified purposes. In its broadest application, this type of legal trust can be in the form of a written will and will that provides specific instructions on how the decedent’s assets are to be shared among the different beneficiaries. In regards to establishing some type of trust fund, an express trust fund can be an oral statement that is ultimately presented in the form of a legal document and used as the basis for establishing and managing such a fund.
There are many reasons why an expressed trust can be a good idea. Individuals who wish to provide ongoing financial support to loved ones may choose to set up a trust that manages the provider’s assets once they pass away. This approach is particularly useful if the lender suspects that the loved ones in question would have difficulty handling the inheritance responsibly. When this is the case, the establishment of what is known as a spendthrift trust provides loved ones with a steady income, but prevents them from withdrawing their entire inheritance at once and possibly losing it through financial mismanagement.
Other examples of expressed trust are commonly found in most nations. A discretionary trust normally designates who can receive disbursements from the trust fund, but leaves the amount and frequency of those payments up to the trustee or fund manager. Charitable trusts allow you to leave property and other assets to a qualified charity. In some cases, it is possible to limit the use of these funds to specific programs or projects managed by that single charity. The naked trust is often a good solution when the goal is to provide ongoing support to a minor or disabled child, as it provides for the definition of guidelines that the administrator is required to respect.
Because an express trust is a deliberate act by an owner or settlor to specify how certain assets are to be disbursed or used, the trust may begin in the form of an oral document but would need to be registered at some point. This is because laws regarding oral statements have varying degrees of merit in various countries. In some parts of the world, establishing the veracity of a trust verbally by confirming two or three people who have heard the settlor express such intentions is as good as a written document. In other countries, oral statements, even if confirmed by outside sources, do not have the value of a legally enforced legal document.
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