Trusts and its Classification

Definition: We know that trust is an equitable obligation. According to Professor Keeton, trust is a relationship which arises wherever a person called the trustee is compelled in equity to hold the property, whether real or personal, and whether by legal or equitable title for the benefit of some persons or for some objects permitted by law, in such a way that the real benefit of the property accrues, not to trustee but the beneficiaries or other objects of the trust.

According to section 3 of the Trusts Act, 1882, A trust is an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner;

The person who reposes or declares the confidence is called the “author of the trust”; the person who accepts the confidence is called the “trustee”; the person for whose benefit the confidence is accepted is called “beneficiary”; the subject-matter of the trust is called “trust property” or “trust money”; the beneficial interest or interest of the beneficiary is his right against the trustee as owner of the trust property; and the instrument, if any, by which the trust is declared is called the “instrument of trust”;

“A breach of any duty imposed on a trustee, as such, by any law for the time being in force, is called “a breach of trust”.

v  According to this definition, there must be four certainties in a trust:-

a)      The intention of the settlor to create a trust must be express and clear.

b)      The purpose for which the trust is to be created.

c)      The property that is to be held in trust, and

d)     The beneficiaries who are to benefit from the trust must be certain and definite.

Classification of Trusts:

According to Maitland, trusts are created by two modes. One is by the act of parties and the other is by operation of law. Express and Implied trusts are the example of the act of parties. Resulting and Constructive are the example of the trusts which are created by operation of law.

According to Hanbury, trusts are either express, implied, resulting or constructive. Express trusts may be executed or executory and completely constituted of incompletely constituted. Snell practically accepts this classification adding private and public, simple and special & perfect and imperfect trusts to the list.

Apart from that, there are also some other kinds of trusts, such as, precatory, secret, voluntary or a trust for value. Though the categories are not exclusive, but we can say that trusts are created by two modes and for the purpose of discussion we divide trusts into nine heads. These are mentioned below:

1)      Express Trusts

2)      Implied Trusts

3)      Resulting Trusts

4)      Constructive Trusts

5)      Executed Trusts

6)      Executory Trusts

7)      Private Trusts

8)      Public Trusts

9)      Simple & Special Trusts

You Can Read Also:- 1)  Executed and Executory Trust and it's Differences

                                      2) Resulting and Constructive Trust and its Differences