Exam 5: Trust Formation: The Three Certainties

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Before an express private trust can be created, two essential elements must be established: 1. **Certainty of Intention**: There must be a clear and unequivocal intention by the settlor (the person who creates the trust) to create a trust. This intention can be demonstrated through the language used in the trust document or the deed of trust. The settlor must intend to impose enforceable duties on the trustee to manage the trust property for the benefit of the beneficiaries. The terms of the trust must be precise enough for the courts to enforce them. If the intention to create a trust is vague or ambiguous, the trust may fail for lack of certainty. 2. **Certainty of Subject Matter**: The trust property, also known as the trust corpus or trust res, must be clearly identified. There must be a clear definition of what assets are part of the trust and the extent of the beneficiaries' interest in those assets. This means that the assets must be described with enough precision that they can be identified and separated from the settlor's other assets. Additionally, the rights that the beneficiaries have in relation to the assets must be clear. If the subject matter is not certain, the trust may fail because there is nothing for the trustees to manage or for the beneficiaries to benefit from. In addition to these two elements, there is often a third requirement: 3. **Certainty of Objects**: The beneficiaries of the trust, or the objects, must be clearly identified or at least be identifiable. The beneficiaries can be individuals, a class of people, or even organizations. If the beneficiaries cannot be determined, then the trust may fail because the trustees would not know to whom they should distribute the trust's assets. These three "certainties" are fundamental for the creation of an express private trust under common law principles. Without these elements, a trust may not be considered valid, and the assets may revert to the settlor or their estate.