1. The Nature of Trusts

Celebrated for their conceptual clarity, titles in the Clarendon Law Series offer concise, accessible overviews of major fields of law and legal thought. This chapter first defines the trust concept. This is followed by discussions of the significance of the various aspects of this ‘definition’ and the ways in which it is contentious. Trust is defined as: a situation in which property is vested in someone (a trustee), who is under legally recognized obligations, at least some of which are of a proprietary kind, to handle it in a certain way, and to the exclusion of any personal interest. These obligations may arise either by conscious creation by the previous owner of the property (the settlor), or because some other legally significant circumstances are present. The chapter then explains the ways in which trusts can come about; the roles of the settlor, beneficiary, and trustee; the objectives of the trust; the need for obligations to be attached to property; trustees as fiduciaries; whether trust is an equitable concept; and the requirement that the trustee should know that a trust is being created.