PastPaperHero | Creation and requirements of express trusts - Formalities for creating express inter vivos trusts

Learning Outcomes

This article explains the formalities governing express inter vivos trusts for SQE1 purposes, including:

classification and creation process for express inter vivos trusts across asset types (land, shares, chattels, money, choses in action), distinguishing valid declarations from complete constitution and identifying when no writing is required.
comparison of trusts of land and trusts of personalty, focusing on s 53(1)(b) LPA 1925 evidential writing, interaction with deeds and registration, and typical resulting trust consequences where formalities are not met.
detailed treatment of s 53(1)(c) LPA 1925 dispositions of subsisting equitable interests, what counts as a "disposition", how cases such as Grey v IRC, Vandervell v IRC, Neville v Wilson, and Oughtred v IRC apply, and when s 53(2) removes the need for writing.
recognition and application of equitable doctrines that mitigate formality and constitution failures, including the fraud principle (Rochefoucauld v Boustead, secret trusts), the every effort principle, Pennington v Waine, Strong v Bird, proprietary estoppel, and constructive and resulting trusts.
exam-oriented analysis of sub-trusts, bare trusts, volunteers, and common multiple-choice traps, with a structured approach to identifying whether a scenario concerns declaring a trust, constituting it, or disposing of an existing equitable interest, and to stating the legal consequences with precision.

SQE1 Syllabus

For SQE1, you are required to understand the formalities for creating express inter vivos trusts and for dispositions of subsisting equitable interests, with a focus on the following syllabus points:

The three certainties required for ANY valid express trust: intention, subject matter, and objects.
The basic position that an express trust of personalty requires no specific formality for its creation.
Rules under s 53(1)(b) LPA 1925: declarations of trust "respecting any land or any interest therein" must be "manifested and proved" by signed writing—what this means, when it must be done, and what occurs if it is not.
The effect of non-compliance with s 53(1)(b): trust is unenforceable (not void), and the property will often be held on resulting trust for the settlor (or settlor’s estate).
Rules under s 53(1)(c) LPA 1925: any “disposition of an equitable interest or trust subsisting at the time of the disposition” must be itself in writing, signed by the disponor or their agent duly authorized in writing, and the result if this formality is not met (disposition void; equitable interest remains with disponor).
The recognized exceptions, notably under s 53(2) (resulting, implied, or constructive trusts), and in cases where equity prevents the use of formalities to perpetrate fraud (Rochefoucauld v Boustead principle).
Distinction in practice and law between declaring a trust (splitting legal and equitable title) and constituting a trust (proper transfer or vesting of legal title in absence of self-declaration).
How s 53(1)(c) applies across asset types, and what types of dealings or arrangements count as a 'disposition' for those purposes (assignment, direction, surrender, release, specifically enforceable contract, etc).
Practical overlap with land law and property transactions: interaction with the Law of Property (Miscellaneous Provisions) Act 1989 (s 2: contracts for sale of land), s 52 LPA 1925 (transfer of legal estate by deed), requirements for valid deeds, and the administrative use of TR1 for co-ownership declarations.
Ability to analyze scenarios and distinguish trusts from gifts, bare trusts from trusts with active duties, and legal from equitable ownership in managing real and personal property.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

A settlor orally declares they hold their shares in a private company on trust for their adult child. Is this declaration valid?
- a) Yes, because trusts of shares require no specific formalities.
- b) Yes, but only if the settlor later confirms it in writing.
- c) No, because all declarations of trust must be in writing.
- d) No, because shares are considered land for formality purposes.
Which section of the Law of Property Act 1925 requires a declaration of trust respecting land to be evidenced by signed writing?
- a) s 52(1)
- b) s 53(1)(a)
- c) s 53(1)(b)
- d) s 53(1)(c)
What is the legal consequence if a declaration of trust respecting land is made orally and never evidenced in writing?
- a) The trust is void.
- b) The trust is valid but unenforceable.
- c) The trust is valid and enforceable due to equity.
- d) The legal title automatically reverts to the settlor.
A beneficiary under a trust wishes to transfer their existing equitable interest to another person. What formality is required under s 53(1)(c) LPA 1925?
- a) The disposition must be made by deed.
- b) The disposition must be evidenced by signed writing.
- c) The disposition must be in writing, signed by the disponor or their agent.
- d) No formality is required if the trust property is personalty.

Introduction

For an express trust created during the settlor's lifetime (an inter vivos trust) to be valid and enforceable, certain legal requirements must be met. In addition to essential elements such as the three certainties (intention, subject matter, and objects), special formalities can apply, especially where the trust property involves land or where subsisting equitable interests are being dealt with. Failure to comply with these formality rules can render a trust unenforceable or a disposition void, resulting in practical consequences for the parties involved—including the potential for a resulting trust in favor of the settlor if the trust fails or is not enforced.

It is important throughout to distinguish:

The creation of a trust (which establishes the split between legal and equitable ownership based on a valid declaration and proper intention), from
The constitution of a trust (which is the process by which legal title is correctly vested in the intended trustee through the correct transfer formalities appropriate for the type of property in question, or by the settlor declaring themselves to be the trustee).

A working knowledge of these distinctions, coupled with the statutory and equitable principles at play, is fundamental for advising clients, analyzing problem scenarios, and addressing MCQs in the SQE1 assessment.

Key Term: inter vivos trust
A trust created by a settlor during their lifetime, as opposed to a testamentary trust, which is created to take effect on death.

Key Term: settlor
The person who creates a trust by transferring or declaring themselves as holding property on trust for the benefit of beneficiaries.

Key Term: express trust
A trust created intentionally by the clear expression of the settlor’s intention, typically through a trust instrument or will, or by unequivocal oral declaration or conduct.

Key Term: constitution
The legal process of transferring (vesting) property in the trustees of a trust so that the trust is completely constituted and can be enforced by the beneficiaries (unless exception applies).

Formalities for Declaring an Express Inter Vivos Trust

An express private trust is validly created only if certain general and property-specific requirements are satisfied. The starting point is always the presence of the three certainties:

Certainty of intention to create a trust (by words, writing, or conduct);
Certainty of the subject matter (what property is subject to the trust and who are the beneficiaries);
Certainty of objects (identifiable beneficiaries or, in some cases, ascertainable purposes that qualify as valid under trust law).

Formality requirements sit alongside these foundational elements. The nature of the property and the type of declaration or transfer determines what further formality is required, and at what stage.

Trusts of Personalty

Trusts involving personal property (personalty)—which includes tangible items such as jewelry, artwork, chattels, as well as intangible property like company shares, intellectual property, and money—typically do not require any special formality for their creation. Provided the three certainties are present, an express trust of personalty may be made orally, in writing, or even inferred from conduct alone.

Key Term: personalty
Any property that is not land or realty, including moveable assets such as money, shares, chattels, and intellectual property.

Key Term: chattel
Tangible moveable personal property, such as a painting, sculpture, or car.

If the settlor is declaring a trust over their own personal property and remains as trustee, the trust is created as soon as the relevant declaration is made—no further transfer of title is needed (the property is already vested in the person now acting as trustee). If a third-party trustee is intended, constitution must be achieved by complying with the relevant transfer requirements for the property in question.

These transfer rules differ according to the type of property:

Chattels (e.g., jewelry, art, furniture): transferred by physical delivery to the trustee, or by deed.
Shares in companies: transferred by executing a stock transfer form and property registration in the company’s register.
Choses in action (e.g., debts): transferred by written notice to the debtor as per s 136 Law of Property Act 1925.
Money: transferred by physical delivery, by payment into the intended trustee’s bank account, or by an electronic funds transfer (title passes on receipt).

If a trust of personalty is incompletely constituted (for example, legal title to shares or chattels has not been transferred to the trustee), the intended beneficiary (if a volunteer, i.e., one who has provided no consideration) cannot enforce the trust. This reflects the equitable maxim that "equity will not perfect an imperfect gift" and "equity will not assist a volunteer." However, exceptions to this rule do exist, such as the "every effort" test (see below) and the rule in Strong v Bird.

Worked Example 1.1

Ahmed tells his friend Chloe that he is holding his collection of vintage vinyl records on trust for his niece, Maya. He makes a list of the records involved but doesn't sign anything. Is this a valid declaration of trust?

Answer:
Yes, potentially. Vinyl records are personalty (chattels). Provided Ahmed's words clearly show an intention to create a trust, the subject matter (the specific records) is certain, and the object (Maya) is certain, no writing is required. The oral declaration is sufficient to create the trust. To constitute the trust if Chloe is to act as trustee, Ahmed must deliver the records to Chloe or execute a deed of gift; if Ahmed remains trustee, no transfer is needed.

Worked Example 1.2

Priya owns 1,000 shares in a private company, Patel & Co Ltd. She orally declares she holds 300 of those shares on trust for her brother, Rohan, and remains trustee. Is writing required to create this trust?

Answer:
No. Shares are personalty. An oral declaration by the settlor who remains trustee is sufficient to create the trust, assuming the three certainties are present. No transfer of legal title is needed to constitute the trust if Priya is trustee. If Priya later appoints an external trustee, she must complete a stock transfer form and secure registration of the trustee as shareholder to constitute the trust in that person.

Constitution across asset classes and equitable mitigations

When a third-party trustee is intended, completion of the relevant transfer formalities is essential. Where the settlor has done all they can to effect a transfer, equity may treat the transfer as complete even though an external step remains outstanding (the every effort principle). For shares, this may be satisfied once a duly executed stock transfer form and share certificate leave the settlor’s control for registration; registration by the company then follows as a matter of course. For land, execution and delivery of a registrable transfer deed to the transferee can suffice in equity pending registration.

Equity may also perfect an imperfect transfer where it would be unconscionable to resile (a very narrow intervention). A further route is the rule in Strong v Bird: if the intended donee or trustee later acquires legal title to the asset as the transferor’s personal representative, an earlier imperfect intended transfer can be treated as perfected provided the intention persisted until death.

Key Term: declaration of trust
The specific act or statement by which a person confirms their intention to hold property for others on stated terms, thus separating legal and equitable title.

Trusts of Land (Realty)

Trusts that deal with land or any interest in land (realty) are subject to specific statutory formalities in addition to the three certainties. The central provision is s 53(1)(b) Law of Property Act 1925

"A declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will."

Key Term: realty
Land, including buildings, fixtures, and any interests in land.

Two key points about s 53(1)(b):

The declaration can be oral, but it is unenforceable unless evidenced by signed writing of the person able to declare the trust. That person is the settlor or (if multiple co-owners are effecting the declaration) each person needed to declare or join in the declaration.
The writing can come after the oral declaration. It must set out all material terms with sufficient certainty (trust property, beneficial interests, and beneficiaries) and be signed by the declarant. Any document may suffice (e.g., letter, email with an electronic signature, memorandum); modern authority accepts electronic signatures where there is an intention to authenticate.

Failure to comply with s 53(1)(b) does not make the trust void, only unenforceable. The legal estate holder will usually hold on resulting trust for the would-be settlor (or their estate), because equity abhors a vacuum and will not allow the legal owner to take a windfall beneficially contrary to the settlor’s intention.

Evidencing a land declaration is separate from the mechanics of transferring legal title to trustees. To constitute a trust in third-party trustees, a registrable disposition is needed (deed and registration for registered land). If the settlor declares themselves a trustee, no transfer is needed.

Worked Example 1.3

Sarah orally declares to her brother, Ben, that she holds her freehold house, 'The Willows', on trust for her nephew, Leo. A week later, she sends Ben a signed letter confirming the details of the trust declaration she made. Is the trust enforceable?

Answer:
Yes. The trust concerns land (realty). Although the original declaration was oral, written evidence (a signed letter) was subsequently provided by Sarah, confirming the essential terms of the trust. This satisfies s 53(1)(b) LPA 1925. The trust is enforceable from the date of the original oral declaration, assuming the letter manifests all material terms.

Worked Example 1.4

Rebecca telephones her sister to say she has declared a trust over her cottage for her daughter until she turns 30. Rebecca later writes to her daughter confirming that a trust exists over the cottage but does not mention the age condition. Does this satisfy s 53(1)(b)?

Answer:
Not fully. The writing must manifest the trust and prove its material terms, including the condition. Since the age condition is omitted, the declaration cannot be enforced on that conditional footing. The court may instead treat the writing as evidencing an unconditional trust if that intention is clear, or the declaration may be unenforceable as to the omitted term.

Declarations on co-owned property and the TR1

Co-owners commonly record beneficial shares when they acquire registered land by completing the “declaration of trust” panel in form TR1. This produces signed writing that satisfies s 53(1)(b). If no declaration is made, a trust of land still arises by statute (TOLATA 1996), but the beneficial shares may then be argued by inference (resulting or constructive trust principles), which is fact-sensitive, unpredictable, and often avoidable by careful use of TR1.

Additional requirements for land: deeds and registration

Transferring a legal estate in land generally requires a deed (s 52 LPA 1925; s 1 LP(MP)A 1989). For registered land, transfer takes effect only on registration. The trust declaration (s 53(1)(b)) is separate: a trust can be declared and evidenced without any transfer of legal title where the legal owner declares themselves a trustee. Conversely, even a perfectly evidenced trust fails to be constituted if legal title must move to third-party trustees and does not do so.

Revision Tip

When you see land in a problem, ask two questions in order:

Is there a valid declaration of trust (three certainties + s 53(1)(b) writing)?
Has the trust been constituted (deed and registration if legal title must move to trustees)?

A “yes” to the first but “no” to the second typically means an incompletely constituted trust that volunteers cannot enforce, subject to limited equitable mitigations.

Exceptions to Formality Requirements for Trusts of Land

Equity prevents a person from relying on statutory formalities to perpetrate a fraud. If A transfers land to B on the clear understanding that B will hold on trust for A, B cannot rely on the absence of signed writing under s 53(1)(b) to deny the trust and take the land beneficially. The court will admit extrinsic evidence to prove the trust and impose a constructive trust to prevent unconscionability. Similar reasoning appears in Bannister v Bannister (widow sold at undervalue on oral promise to remain; purchaser held on constructive trust).

Worked Example 1.5

Nadia conveys her farm to Jerome on the express understanding he will hold it on trust for her while she is abroad. No written evidence is produced. Jerome later claims the farm beneficially and relies on s 53(1)(b). Can Nadia obtain relief?

Answer:
Yes, potentially. Equity will not allow s 53(1)(b) to be used as an instrument of fraud. If Nadia can adduce satisfactory evidence of the trust, the court may enforce it via a constructive trust notwithstanding the lack of signed writing, to prevent Jerome’s unconscionable denial.

Resulting, implied, or constructive trusts (s 53(2))

Section 53(2) LPA 1925 provides that s 53(1) does not affect the creation or operation of resulting, implied, or constructive trusts. These arise by operation of law and need no signed writing. Common settings include common intention constructive trusts of the family home, automatic resulting trusts where an express trust fails to exhaust the beneficial interest, and the imposition of constructive trusts to prevent fraud or unjust enrichment. In family home disputes, a constructive trust may be imposed in line with the couple’s common intention and detrimental reliance, outside s 53(1)(b).

Key Term: resulting trust
A trust implied by law when the legal owner does not take all beneficially, most commonly to return the property to the settlor (or their estate) when an express trust fails or does not exhaust the beneficial interest.

Key Term: constructive trust
A trust imposed by law to address unconscionable conduct or prevent unjust enrichment, typically where one party induces another to act to their detriment with a shared expectation that the property would be held for their benefit.

Secret trusts (briefly) and land

Secret and half-secret trusts are enforced to prevent fraud on the testator’s intentions. They are generally characterized as constructive for formality purposes, so that s 53(1)(b) does not apply by virtue of s 53(2). A secret trust of land, therefore, may be enforced without signed writing to evidence the declaration.

Interplay with Land and Contract Law: Additional Practical Formalities

Creating an express trust of land often overlaps with other legal formalities for contracts and conveyances of land:

Contracts for the sale or disposition of an interest in land must be in writing, signed by all parties, and contain all agreed terms (s 2 Law of Property (Miscellaneous Provisions) Act 1989). Failure renders the land contract unenforceable. However, a constructive trust or proprietary estoppel may still arise where unconscionability is established notwithstanding non-compliance with s 2.
Transfer or conveyance of a legal estate in land must be by deed (s 52(1) LPA 1925; s 1 LP(MP)A 1989).
Legal ownership of registered land is only transferred when the transfer is registered at HM Land Registry.

A declaration of a trust does not itself transfer legal title. A fully effective trust of land often requires both compliance with trust formalities (s 53(1)(b)) and completion of legal transfer steps for constitution, where the legal title is to move to trustees.

Transfer formalities recap:

Land: Deed of transfer and registration at Land Registry.
Shares: Stock transfer form and registration in company's register.
Chattels: Delivery or deed.
Money: Delivery or bank transfer.

Exam Warning 1

Do not conflate s 53(1)(b) (evidencing a declaration of trust of land) with s 2 LP(MP)A 1989 (writing for a contract to create or transfer an interest in land). They serve different purposes. A trust can be validly declared (with appropriate writing) without any antecedent contract, and a land contract can be valid without creating any trust.

Formalities for Disposing of Equitable Interests

Once a valid trust exists, beneficiaries hold equitable interests. Dispositions of subsisting equitable interests are governed by s 53(1)(c) LPA 1925:

"A disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will."

Key Term: disposition of equitable interest
The act by which a beneficiary parts with or deals with their existing beneficial interest under a trust in favor of another person.

Key Term: subsisting equitable interest
An existing beneficial interest under a trust, already split from legal ownership, at the time the disposition is made.

Key features:

Applies to dispositions of subsisting equitable interests (not to the initial split when a trust is first declared).
Applies regardless of whether the relevant trust property is land or personalty.
The disposition itself must be in writing, signed by the disponor (or by an agent lawfully authorized in writing), or be made by a duly executed will.
Mere oral directions, even if later confirmed, will not suffice; the act of disposition must be in writing at the time it is made.
Non-compliance renders the disposition void. The equitable interest remains with the disponor.

Types of dispositions caught include:

Direct assignment of a beneficial interest to another person.
Direction to trustees to hold the equitable interest for someone else (Grey v IRC).
Release or surrender of a beneficial interest to the trustees.
Agreements to assign a beneficial interest for value; in some circumstances, the equitable interest may shift under a constructive trust, engaging the s 53(2) exception.

Worked Example 1.6

Liam, the sole adult beneficiary under a bare trust, orally instructs the trustees to hold the trust assets on trust for his friend Ava. No writing is executed. Has the equitable interest moved?

Answer:
No. Liam’s instruction effects a disposition of his existing equitable interest and must comply with s 53(1)(c). The oral direction is void; the equitable interest remains with Liam until a valid, written, and signed disposition is made.

Worked Example 1.7

Eliza owns a remainder equitable interest in 200,000 shares (her mother has the life interest). Eliza orally agrees to exchange her remainder interest for her mother’s separate personal shareholding of 72,700 shares. The parties later execute a deed of release. Is stamp duty applicable and was s 53(1)(c) engaged?

Answer:
Yes. The exchange of Eliza’s remainder interest is a disposition of a subsisting equitable interest requiring compliance with s 53(1)(c). The disposition is only effective upon the signed writing (the deed). Duty can be levied on that instrument. The earlier oral bargain alone does not pass the equitable interest.

What does NOT constitute a "disposition" for s 53(1)(c)?

Direction by a beneficiary of a bare trust to transfer legal title to a third party absolutely (Vandervell v IRC): where legal and equitable interests merge in the transferee, no separate equitable disposition occurs; s 53(1)(c) does not apply.
Disclaimer of a beneficial interest: refusing to accept an interest is not a disposition to another.
Declaration of a sub-trust where the original beneficiary retains active duties (and thus does not “drop out”): this can amount to creating a further (sub) trust, not a disposition by the beneficiary, so s 53(1)(c) does not apply. If, however, the beneficiary declares a bare sub-trust and retains no duties, it is treated as a disposition and must satisfy s 53(1)(c).

Key Term: bare trust
A trust in which the trustee has no active duties and must follow the absolute direction of the sole adult beneficiary, who is absolutely entitled.

Worked Example 1.8

Noor is the absolute beneficial owner under a bare trust of 1,000 shares held by T. She directs T to transfer the legal title to the charity Helping Hands so that the charity becomes the absolute owner. Is s 53(1)(c) engaged?

Answer:
No. Under Vandervell, directing the transfer of legal title to a third party such that the recipient becomes absolute owner ensures legal and equitable interests merge in the recipient. There is no separate disposition of the equitable interest; s 53(1)(c) is not triggered.

Worked Example 1.9

Ben holds an equitable life interest under a trust. He signs a deed stating he will hold his equitable interest as trustee for his disabled cousin, with obligations to apply income in specified ways for support. Is s 53(1)(c) applicable?

Answer:
No, provided Ben’s declaration involves active trust duties. Where the original beneficiary assumes trustee obligations and remains subject to active duties, the arrangement is properly characterized as a new sub-trust rather than a disposition. If it were a bare sub-trust (no active duties) with Ben dropping out, s 53(1)(c) would apply.

Grey v IRC: A beneficiary’s oral direction to trustees to hold property for others instead of the beneficiary was a disposition of a subsisting equitable interest that required writing under s 53(1)(c). A later confirmatory deed was treated as the effective disposition (and was taxable as such).
Vandervell v IRC: A beneficiary directed the bare trustees to transfer legal title in shares to a charity; both legal and equitable interests passed together, so there was no disposition of a subsisting equitable interest and s 53(1)(c) did not apply. However, an option retained on repurchase fell into a resulting trust in Vandervell (No 2): failure clearly to direct the beneficial ownership of the option caused a resulting trust for Vandervell.

Contracts to assign and the s 53(2) exception

A specifically enforceable contract to assign a beneficial interest can, in some circumstances, create a constructive trust (outside s 53(1)(c) by s 53(2)). In Neville v Wilson, a contract for the transfer of equitable interests under shares was held specifically enforceable; the parties held on constructive trust for each other pending completion. Because a constructive trust arose, s 53(1)(c) did not apply by virtue of s 53(2). By contrast, in Oughtred v IRC, the House of Lords treated an oral bargain between mother and son as not itself transferring the equitable interest; a later deed of release was the operative instrument (and attracted duty). The precise effect turns on enforceability and the court’s willingness to impose a constructive trust on the facts.

Releases and surrenders to trustees

A beneficiary’s release or surrender of a beneficial interest to the trustees is a disposition and must comply with s 53(1)(c). Writing, signed by the beneficiary or their lawfully authorized agent, is essential to avoid invalidity.

Agents and signatures

Under s 53(1)(c), an agent can sign a disposition if lawfully authorized in writing by the disponor. Modern practice accepts electronic signatures for “writing” and “signature” where the evidence shows an intent to authenticate (e.g., typed name in an email footer can suffice in suitable contexts), but always ensure the formality is clear and the agency authority itself is in writing.

Exam Warning 2

The formality under s 53(1)(c) is that the disposition itself must be in signed writing. It is not enough to merely evidence an earlier oral disposition—unlike s 53(1)(b), which allows later written evidence to prove an oral declaration respecting land.
Analyze whether a constructive trust arises (e.g., under a specifically enforceable contract) so that s 53(1)(c) falls away via s 53(2). If not, s 53(1)(c) must be complied with.

Practical Context and Common Pitfalls

Do not confuse creating a new equitable interest (e.g., self-declaration of trust of personalty) with disposing of a subsisting equitable interest (s 53(1)(c) territory).
Distinguish “direction to transfer legal title to a third party absolutely” (Vandervell) from “direction to hold on trust for a new beneficiary” (Grey).
In sub-trusts, identify whether the original beneficiary has active duties (no s 53(1)(c)) or has effectively dropped out (s 53(1)(c) applies).
If the disponor uses an agent, ensure the agent’s authority is in writing and that the disposition instrument is signed accordingly.
Disclaimers are not dispositions; releases are.

Additional Context: Constitution and Property Transfer Formalities

Beyond the statutory rules of s 53 LPA 1925, the trust must also be properly constituted—that is, legal title must be vested in the trustee(s) according to the formalities applicable to the property involved.

For land: a transfer by deed (s 52 LPA 1925; s 1 LP(MP)A 1989) and registration at HM Land Registry for registered land.
For company shares: a stock transfer form and registration in the company's register of members (Stock Transfer Act 1963). Title passes only upon registration.
For chattels: delivery or by deed.
For money: physical delivery, bank transfer, or, for cheques, upon clearance.

Where the settlor declares themselves as trustee and is the legal owner, no further transfer is needed. If another is appointed trustee, the settlor must complete the appropriate transfer for constitution to be complete. If constitution fails and the beneficiary is a volunteer (without consideration), the trust is generally unenforceable until and unless one of the equitable exceptions applies (e.g., the every effort rule, proprietary estoppel, rule in Strong v Bird).

Worked Example 1.10

Jorge executes a trust deed declaring a trust of his leasehold flat for his niece and names two friends as trustees but never executes a transfer deed to vest legal title in them. Can the niece enforce the trust?

Answer:
Not yet. The declaration may satisfy s 53(1)(b) (writing), but the trust is not completely constituted because legal title was not transferred to the intended trustees. The niece is a volunteer; equity will not perfect the imperfect constitution, subject to rare exceptions (e.g., every effort satisfied, rule in Strong v Bird if an intended trustee later becomes executor, or proprietary estoppel if detrimental reliance and unconscionability are proven).

Key Term: secret trust
An arrangement by which a testator intends for property passing under a will to be held on trust for a beneficiary whose identity (or the fact of the trust) is not disclosed in the will itself; enforced in equity even if statutory formalities are not complied with, to prevent fraud.

Key Term: declaration of trust
The specific act or statement by which a person confirms their intention to hold property for others on stated terms, thus separating legal and equitable title.

Constitution: equitable mitigations and their limits

Every effort (often called the “Re Rose principle”): if the settlor has done all that is required of them and only a third party’s act is outstanding, equity may treat the transfer as complete in equity pending that act. This typically aids share transfers (company registration outstanding) and land (registration outstanding after execution and delivery of a registrable transfer).
Unconscionability (Pennington v Waine): in narrow, fact-specific circumstances, a court may perfect an imperfect gift where it would be unconscionable for the donor to retract. Use cautiously; it is not a general cure for incompleteness.
Strong v Bird: if the intended donee or trustee later becomes the transferor’s executor or administrator, and the intention persisted to death, legal title vesting in that role may perfect the earlier imperfect intended transfer or trust.

Worked Example 1.11

Tanya completes and delivers a stock transfer form and original share certificate to the intended trustee. The company has not yet registered the trustee as shareholder. Has the trust been constituted?

Answer:
Likely yes in equity (every effort principle). Tanya has done all that is required of her; registration is a company act. Equity treats the transfer as complete between settlor and trustee pending registration. The trustee can compel registration.

Worked Example 1.12

Omar signs a TR1 to transfer his registered freehold to X as trustee for his daughter, hands it to X, but X has not yet lodged it for registration. Omar dies. Has constitution failed?

Answer:
Equity will probably treat the transfer as complete in equity (every effort principle), because Omar executed and delivered a registrable transfer; registration is a third-party act. Legal title remains with Omar’s PR until registration, but X may have an equitable title sufficient to constitute the trust in equity and compel registration.

Worked Example 1.13

Claire emails her trustees: “I hereby release my life interest in the Alpha Trust.” Her typed name appears at the end of the email. Is s 53(1)(c) satisfied?

Answer:
Yes, in principle. The release is a disposition of a subsisting equitable interest. An email can amount to “writing” and the typed name to a “signature” if intended to authenticate. Provided Claire is the disponor and the content is clear and unconditional, s 53(1)(c) is likely satisfied.

Worked Example 1.14

Dev, an absolute beneficiary, declares in a signed deed that “I hold my equitable interest in the Beta Trust on trust for my sister until she completes university; I must apply income for her tuition and living costs.” Is s 53(1)(c) engaged?

Answer:
No. Dev has declared a sub-trust with active duties; he remains subject to obligations and has not dropped out. This is not a disposition within s 53(1)(c). If he had declared a bare sub-trust and retained no duties, s 53(1)(c) would be engaged.

Worked Example 1.15

Farah orally instructs trustees to change from holding on trust for her to holding on trust for her cousin. The trustees later sign a document confirming they hold for the cousin as from the earlier date. Has the equitable interest moved?

Answer:
The oral instruction was void under s 53(1)(c). The later signed document is the effective disposition; the equitable interest moves only from that later date (as in Grey). Any tax or duty assessed will be on the written instrument.

Practical guidance: evidencing, authorizing, and timing

Evidencing declarations of land trusts: ensure the signed writing contains all material terms. If a condition (e.g., “until 30”) is material, include it in the writing. A later email or letter can suffice if signed and sufficiently certain.
Timing for s 53(1)(b): later writing can validate enforceability of an earlier oral declaration (it “manifests and proves” the declaration), with effect from the date of the oral declaration, provided the writing captures the material terms.
Timing for s 53(1)(c): writing must accompany the disposition itself; backdating an otherwise oral disposition does not save it.
Agency and s 53(1)(c): if a solicitor or other agent will sign a disposition, obtain clear written authority from the beneficiary before signature.
Electronic signatures: acceptable where the context shows an intention to authenticate. Keep records demonstrating authority and assent.

Revision Tip.

When you see a beneficiary “moving” their beneficial interest:

Ask “Has legal title moved to a third party absolutely?” If yes, Vandervell: s 53(1)(c) likely not engaged.
If the legal title remains with the trustee and only the beneficial destination changes, Grey: s 53(1)(c) applies unless a constructive trust arises.
If a sub-trust is declared, identify active duties. No duties (bare sub-trust) = disposition; active duties = new trust, not a disposition.

Further illustrations and edge cases

Neville v Wilson: specifically enforceable contracts to assign equitable interests can create constructive trusts that fall within s 53(2), bypassing s 53(1)(c). Check enforceability and certainty.
Re Paradise Motor Co: a release of a beneficial interest to trustees is a disposition needing s 53(1)(c) compliance.
Disclaimer vs release: disclaimers (refusals to accept) are not dispositions; releases (surrender to trustees) are dispositions and need s 53(1)(c).

Worked Example 1.16

Aisha, a named beneficiary, writes (and signs) to the trustees before any distribution, “I disclaim any interest under this trust.” Must she comply with s 53(1)(c)?

Answer:
No. A disclaimer is not a disposition to another person; she simply refuses the interest. The trustees treat her as if she had predeceased for the relevant gift, depending on the trust terms.

Exam Warning 3

Do not assume that every written instrument “affecting trusts” satisfies the right formality. Ask:

Is the document evidencing an earlier oral declaration of a trust of land (s 53(1)(b))?
Or is it the disposition instrument of a subsisting equitable interest (s 53(1)(c))?
Or is it a deed/transfer required for legal title (s 52 LPA 1925 / s 1 LP(MP)A 1989)?

The wrong formal route can render an arrangement unenforceable, void, or merely unconstituted.

Sub-trusts and active duties: practical analysis

A beneficiary B under a trust may declare a sub-trust of B’s interest. The consequences:

If B declares themselves trustee of their equitable interest for C and remains subject to substantive duties (e.g., to collect income and apply it for defined purposes), courts typically treat this as a valid declaration of a further trust by B, not a disposition within s 53(1)(c). No writing is mandated beyond any applicable rules for the property type (and s 53(1)(c) does not apply because there is no disposition of B’s interest).
If B declares a bare sub-trust (effectively a pass-through with no active duties), B drops out and the practical effect is a disposition of B’s equitable interest to C. Written compliance with s 53(1)(c) is therefore required.
Returning to the relevant property type: if the sub-trust involves land (i.e., B’s equitable interest in land), remember that s 53(1)(b) can apply to declarations respecting land. However, where B’s sub-trust is properly characterized as constructive or implied, s 53(2) can intervene. Focus on the characterization first, then test the formalities.

Contracts for sale, estoppel, and constructive trusts (overlap with land)

An oral contract to grant or convey an interest in land is generally unenforceable (s 2 LP(MP)A 1989), but equitable doctrines can still operate:

A constructive trust may arise where it would be unconscionable to deny a promised interest, typically coupled with detrimental reliance (e.g., Yaxley v Gotts).
Proprietary estoppel can require the promisor to give effect to an assurance that was relied upon to detriment, potentially resulting in an interest in land outside s 2. Where the court gives effect by imposing a constructive trust, s 53(2) prevents s 53(1)(b) from defeating that equity.

These are fact-intensive and exceptional; do not assume they apply. Evidence of assurance, reliance, and detriment is essential.

Coordination with trustees’ duties

Once a trust is validly declared and constituted, trustees must apply trust powers and duties lawfully. Where beneficiaries move equitable interests around (complying with s 53(1)(c)), trustees must record changes carefully, update their registers or records, and act impartially between beneficiaries. Trustees should also ensure they receive valid instruments and authorities before recognizing a change in beneficial entitlement.

Key Point Checklist

This article has covered the following key knowledge points:

Express inter vivos trusts of personalty require no statutory formalities for valid creation: they may be oral, written, or inferred by conduct, provided the three certainties are satisfied.
Express trusts of land (realty), whether declared by self or by transfer to a third party, must be evidenced in writing signed by the settlor (s 53(1)(b) LPA 1925) to be enforceable.
Failure to evidence a trust of land in signed writing does not render it void, but unenforceable; trustees will generally hold on resulting trust for the settlor or the settlor's estate.
Dispositions of existing (subsisting) equitable interests in any property require that the disposition itself be in writing, signed by the disponor or their lawfully authorized agent (s 53(1)(c) LPA 1925), or by will. Non-compliance renders the disposition void.
S 53(2) LPA 1925 provides an explicit exception for resulting, implied, or constructive trusts, which do not need to comply with statutory writing requirements even in relation to land.
Equity will intervene to prevent the use of statutory formality rules (such as s 53(1)(b) and the Wills Act) as instruments of fraud (e.g., Rochefoucauld v Boustead, secret trusts).
The effect of failing to properly constitute a trust is that volunteer beneficiaries cannot enforce the trust; equity will not perfect an imperfect gift, subject to limited exceptions (e.g., every effort test, proprietary estoppel, rule in Strong v Bird).
Distinction must be drawn between declaring a trust (and thereby creating a split of ownership) and disposing of an already existing equitable interest.
Directions to transfer legal title (where beneficial ownership merges) do not require compliance with s 53(1)(c); but directions to transfer only beneficial interest (with legal title remaining in the trustee) do require it (compare Vandervell v IRC, Grey v IRC).
Declarations of sub-trusts attract s 53(1)(c) only where the original beneficiary ceases to have active duties and thus disposes of the equitable interest.
Agents can sign a disposition of an equitable interest if appropriately authorized in writing; modern electronic signatures can suffice if intended to authenticate.
Formalities for the constitution and transfer of trusts vary with the type of asset involved (deeds for land, stock transfer and registration for shares, delivery for chattels, notice for choses in action).
Secret and half-secret trusts are enforced by equity to prevent statutory formalities being used for fraud, with secret trusts usually exempted from s 53(1)(b) by characterization as constructive trusts.
Testamentary trusts are subject to the Wills Act 1837: must be in writing, signed, and witnessed by two individuals present at the same time.
Trustees must not recognize changes in beneficial ownership unless satisfied that s 53(1)(c) has been complied with or that an exception (s 53(2)) applies.

Key Terms and Concepts

inter vivos trust
settlor
express trust
constitution
personalty
chattel
realty
declaration of trust
resulting trust
constructive trust
secret trust
disposition of equitable interest
subsisting equitable interest
bare trust

Creation and requirements of express trusts - Formalities fo...