EXPRESS TRUST

C
EXPRESS TRUST
•An express trust is one in which can come into
existence only by the execution of an intention to create
it by the trustor or the parties.

•Express trusts are frequently used in common law

jurisdictions as methods of wealth preservation or
enhancement.
Art. 1443
•No express trusts concerning an immovable or
any interest therein may be proved by parol
evidence.
Art. 1443
•By virtue of this article, a writing is necessary to
prove an express trust concerning an immovable or
any interest therein.

•The requirement is required for the purposes of proof

and not for validity.
This requirement may also be included under the
Statute of Fraud.
Evidence to prove express trust
Who has the burden of proof?

As a general rule, the burden of proving the existence

of a trust lies on the party alleging its existence and, to
discharge the burden, it is generally required that his
proof be clear and satisfactory as well as convincing.
Failure to object parol evidence
Like the defense of the Statute of Frauds, the
defense that express trusts cannot be proved by
parol evidence may be waived either by failure to
interpose timely objection against the presentation
of oral evidence not admissible under the law or
by cross-examining the adverse party and his
witnesses along the prohibited lines.
Art. 1443
•To affect third person, a trust concerning an
immovable or any interest therein must be
embodied in a public instrument and registered
in the Registry of Property.
Art. 1443
•An express trust over personal property or any
interest therein, whether the property is subject
to the trust is real or personal, may be proved
by oral evidence.
Art. 1444
No particular words are required for the creation
of an express trust, it being sufficient that a trust
is clearly intended.
Creation of an Express Trust
• Express trust
• those trusts voluntarily and intentionally created by direct
and positive act of the trustor, by some writing, deed, will, or
oral declaration showing an intention to create the trust.
• No particular words are required or essential, it being
sufficient that a trust is clearly intended by the direct and
positive acts of the parties
Creation of an Express Trust
• Express trust
• Cannot be assumed from loose and vague declarations or
circumstances capable of other interpretations
• Consideration is not necessary
Creation of an Express Trust
• Terminology used is not controlling
• Technical or particular forms of words or phrases are not
essential to the manifestation of an intention to create a trust.
• What is important is whether the trustor or the party
manifested an intention to create the kind of relationship
which in law is known as a trust.
 Kinds of Express Trust
• Charitable trust
• Designed for the benefit of a segment of the public or of the
public in general
• For charitable purposes, for the good or general benefit of
humanity.
• Private Trust
• Not for the good of the public in general or society as a whole
Kinds of Express Trust
• Accumulation Trust
• One that accumulates income to be reinvested by the trustee in the trust
for the period of time specified.
• Spendthrift Trust
• One established when the beneficiary needs to be protected because of
his inexperience or immaturity from his imprudent spending habits or
simply because the beneficiary is spendthrift.
• Income will be paid to the beneficiary only when actually necessary.
• Trustee may pay directly to the creditor for obligations of the
beneficiary when necessary
 Kinds of Express Trust
• Sprinkling Trust
• It gives the trustee the right to determine the income beneficiaries
who should receive income each year and the amount thereof.
• Income that is not distributed in any given year is added to the
corpus, as in an accumulation trust.
• Discretionary Trust
• The trustee has the discretion to pay or not to pay the income or
principal
Cy-près Doctrine (see-pray)
• When the original objective of the settlor or the testator
became impossible, impracticable, or illegal to perform,
the doctrine allows the court to amend the terms of the
charitable trust as closely as possible to the original
intention of the testator or settlor to prevent the trust from
failing
Wesley United Methodist Church v.
Harvard College
• The trustees requested a modification of the trust under the
Cy-près doctrine holding that the original charitable
purpose cannot be fulfilled, the court shall try to follow the
transferor’s intention as closely as possible.
• The court held that the original terms were no longer
realistic and while the charitable intent of the transferor is
still valid, the terms were too narrow.
 Wesley United Methodist Church v.
Harvard College
• In applying the Cy-près Doctrine, the court ruled that the
trustee could apply the earnings from the trust fund at their
discretion, and in an unlimited amount to any deserving
applicant for the scholarship.
• Applicants could be male or female, member or not of the
congregation, no longer capped at 500 dollars
When can a trustee sue or be sued alone?
• It is essential that his trust be express in order to sue a trustee
alone or in order for him to sue alone.
• The payment of indemnity does not make the insured a trustee
of the insurer.
Article 1445
•Art. 1445. No trust shall fail because the
trustee appointed declines the designation,
unless the contrary should appear in the
instrument constituting the trust.
Acceptance
•Acceptance of the trust by a trustee is
necessary to charge him with the office of the
trustee and the administration of the trust and
to vest the legal title in him. However, such
acceptance shall not invalidate the trust. In case
the trustee should decline the court would
appoint a trustee to fill his office
Decline
•One designated or appointed as trustee may decline the
responsibility and thereby be free from any legal or
equitable duty or liability in the matter. Unless, a contrary
intention appears in the instrument constituting the trust.
•Decline or refusal or disqualification shall not invalidate
the trust nor vest legal as well as equitable title in the
beneficiary.
Renunciation
•Renunciation of a trust after its acceptance can only be by
resignation or retirement with court approval or at least,
with agreement of beneficiaries and on satisfaction of all
legal liabilities growing out of the acceptance of the trust.
•A contract to renounce, for a pecuniary consideration, the
right to act as a trustee has generally been recognized to
be against public policy.
• When a person administering property in the character of
trustee inconsistently assumes to be holding in his own
right, this operates as renunciation of the trust and the
beneficiaries in the property are entitled to maintain an
action to declare their right and remove the unfaithful
trustee.
Article 1446
•Art. 1446. Acceptance by the beneficiary is
necessary. Nevertheless, if the trust imposes
no onerous condition upon the beneficiary,
his acceptance shall be presumed, if there is
no proof to the contrary. 
Article 1446
•Acceptance of the beneficiary is a vital component in the
creation and validity of the trust
•A presumption of acceptance arise in an express trust, it
being beneficial to the beneficiary. Such presumption is
not conclusive.
•Acceptance must be shown if the trust should impose
some onerous condition.
•Acceptance may be implied or express.