FLK2 · Trusts

Formalities & constitution of trusts

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

TR.02 — Formalities & Constitution of Trusts

Two separate hurdles. A trust can satisfy the three certainties yet still fail if (a) the required formalities are missed, or (b) it is not constituted. Get both right.

Formalities (creation)

Lifetime trust of land: must be manifested and proved by signed writing — s.53(1)(b) LPA 1925. This is an evidential rule: an oral declaration of a land trust is valid but unenforceable until written evidence exists. Writing can come later.
Disposition of a subsisting equitable interest: must itself be in signed writing — s.53(1)(c) LPA 1925. Failure makes it void, not just unenforceable. (Grey v IRC; contrast Vandervell v IRC — transferring the whole legal+beneficial title is not a s.53(1)(c) disposition.)
Trusts of personalty (incl. shares, money): no formalities — a clear oral declaration suffices (Paul v Constance: "the money is as much yours as mine").
Testamentary trusts: must comply with s.9 Wills Act 1837 (signed writing, two witnesses).
Resulting, implied and constructive trusts are exempt from s.53(1)(b)/(c) — s.53(2).

Constitution (the trust property must be vested)

A trust is constituted by the settlor either:

declaring himself trustee (title already vested — nothing more needed), or
transferring legal title to trustees using the correct method (deed for land; stock transfer form + registration for shares; delivery for chattels).

Core rule: Milroy v Lord — equity will not perfect an imperfect gift, and will not treat a failed transfer as a self-declaration of trust.

Key exceptions to "equity won't assist a volunteer"

Every-effort / Re Rose: transfer effective in equity once the settlor has done everything required of him and put the matter beyond his control (e.g. signed transfer + share certificate handed over).
Unconscionability / Pennington v Waine: transfer upheld where it would be unconscionable to resile.
Donatio mortis causa, the rule in Strong v Bird (donee becomes executor), and proprietary estoppel.

Common traps

s.53(1)(b) = evidenced in writing (unenforceable if not); s.53(1)(c) = made in writing (void if not). Don't conflate.
"Imperfect gift" is not saved by reinterpreting it as a declaration of trust (Jones v Lock).
Three certainties ≠ constitution — both must be present.
Personalty needs no formality; only land triggers s.53(1)(b).

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