FLK2 · Trusts

Creation & the three certainties

SQE1 revision notes — the key rules, leading cases and common traps for this topic, in plain English and current to 2026.

TR.01 — Creation of Express Trusts & the Three Certainties

An express private trust is validly created only if the settlor has the capacity and intention to create it, the three certainties are satisfied, the trust is constituted (legal title vested in trustees), and any formality requirements are met. The three certainties (per Knight v Knight (1840)) are the analytical core.

1. Certainty of intention

The settlor must intend to impose a binding trust obligation, not merely express a hope, wish or moral request. Look at substance, not labels — the word "trust" is neither necessary nor sufficient.
Precatory words ("in full confidence", "feeling confident", "desire") do NOT create a trust: Lambe v Eames; Re Adams and the Kensington Vestry. Contrast Comiskey v Bowring-Hanbury (whole will showed a trust).
Conduct can suffice — no special form: Paul v Constance ("the money is as much yours as mine").

2. Certainty of subject matter

(a) The trust property must be identifiable. A share of intangible, fungible property can be certain (Hunter v Moss — 50 of 950 identical shares), but a quantity of tangible goods not yet segregated fails (Re London Wine; Re Goldcorp).
(b) The beneficial interest must be ascertainable ("the bulk" / "reasonable income" fails — Palmer v Simmonds). If only this fails, property results back to settlor/estate.

3. Certainty of objects (who benefits) — the test depends on trust type:

Fixed trust: the complete list test — you must be able to list every beneficiary (IRC v Broadway Cottages).
Discretionary trust: the "is or is not" / given postulant test — can it be said with certainty whether any given individual is or is not a member of the class (McPhail v Doulton; Re Baden (No 2)).
Beware conceptual uncertainty (vague class definition — fatal) vs evidential uncertainty (proof difficulty — not fatal for discretionary trusts). Also watch administrative unworkability (class too wide — R v District Auditor, ex p West Yorkshire) and capriciousness.

Common SQE1 traps

A gift subject to a condition is not a trust — test for an obligation.
Mere segregation language; "bulk"/"most"; precatory phrasing.
Applying the complete-list test to a discretionary trust (wrong — use given-postulant).
Confusing conceptual with evidential uncertainty.
Failure of objects → resulting trust back to settlor; uncertain intention → outright gift to recipient.

Try a real SQE1 question

Straight from the bank. Answer it, then see the worked reasoning and the tutor — no signup to try.

A woman is the treasurer of a small amateur football club. Members pay £20 each month in cash, which the woman is instructed by the club's rules to bank into the club's dedicated account within seven days. One month she receives £200 in subscriptions but, being short of money, uses the cash to pay her own gas bill. She intends to replace the £200 from her wages before anyone notices, and she does in fact pay an equivalent £200 into the club account two weeks later. The woman is charged with theft of the £200. Which of the following is the strongest basis for finding the property belonged to another at the time she used it?

Before you book a £1,934 exam

Strong on this topic? SQE1 tests 137 of them — and 59% failed in July 2025. See where you stand across all of them, free.

✓An AI tutor on every question that already knows the answer — the part nothing else has
✓5 full mock papers at real exam pace, plus unlimited drilling — no daily cap
✓The whole 2,000+ bank, verified and source-cited to the law, all 137 areas
✓Your weak-spot map: exactly where you’re losing marks

Start my free diagnostic — one tap →

Free. No card. 25 questions, about 15 minutes. Full SQE1 courses run £1,500–£4,000 — this starts at £0.

Creation & the three certainties

TR.01 — Creation of Express Trusts & the Three Certainties

Try a real SQE1 question

More Trusts topics