Implied trust Definition

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GLOSSARY

What does Implied trust mean?

A trust declared by a party not directly but by implication

An implied trust arises in circumstances where it is necessary for an inference to be drawn from the available admissible evidence that this was what the settlor intended. The expression is also used to distinguish constructive and resulting trusts from express trusts.

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Nature and classification of trusts—the nature and classification of trusts

Nature of trustsThe trust conceptTypically, the settlor is the original owner of property and creates a trust by conveying it to one or more trustees and manifesting an intention that it is to be held on trust for one or more beneficiaries or for the accomplishment of a particular purpose. The trustees become owners at common law and hold the property or rights in trust for the beneficiaries (cestuis que trust) or that purpose. The trustees come under an equitable obligation enforceable by the beneficiaries. No trust is created, whatever the intention of the settlor, unless legal title is vested in the trustee (this is known as constituting the trust).DefinitionWhile the trust concept is recognisable, a definition is not so easy.The definition set out in The Law of Trusts and Trustees 10th edition by Underhill and Hayton was adopted by the Court of Appeal in Green v Russell per Romer LJ: 'A trust is an equitable obligation, binding a person (who is called a trustee) to deal with property over...

Creation of trusts—by declaration

Express lifetime declarationsWhere a trust is created by an express lifetime declaration, the settlor simply declares that they hold the trust property on trust for the specified person or object absolutely. The settlor must be unequivocal in their declaration and should communicate the terms of the trust to the beneficiaries. The following must be present:•there must be property capable of being subjected to a trust•the trust must meet the requirements for formal validity•the terms of the trust must be sufficiently certain (essential validity)•the purpose of the trust must not be unlawfulEvidential requirements—personaltyProvided the conditions for the essential validity of the trust are fulfilled, a declaration of trust in respect of personalty (other than an equitable interest) may be declared:•in writing•orally or•(in exceptional cases) by conductThere are no legal requirements as to the form of a declaration of trust of personalty. However, it is good practice to ensure that all the terms of such a trust are contained in a written instrument in order to establish the terms of the trust...

Discover our 9 Practice Notes on Implied trust

An individual is the sole freeholder of residential premises. His brother occupied the premises from 1983 until his death in 2007, and since then his sister in law has occupied. No rent was ever paid by his brother or by his sister in law. Is the sister in law entitled to any rights or statutory protections in respect of their occupation?

An individual is the sole freeholder of residential premises. His brother occupied the premises from 1983 until his death in 2007, and since then his sister in law has occupied. No rent was ever paid by his brother or by his sister in law. Is the sister in law entitled to any rights or statutory protections in respect of their occupation? Trespasser or oral tenancy It seems unlikely that the sister in law is in occupation as a: • trespasser (albeit a tolerated one) given the circumstances and length of her occupation; or • under a lease on the basis that leases can only be made orally when: ◦ it is for a term not exceeding three years ◦ it is not of an incorporeal hereditament ◦ it is to take effect in possession, and ◦ it is at the best rent reasonably obtainable without taking a fine See Law of Property Act 1925, ss 52 and 54 and our Q&A A landlord let a property to tenants on...

Is an employer able to enforce post-termination restrictions in the employment contract where (a) the employer has previously committed a fundamental or repudiatory breach of that contract, in response to which the employee did not resign and claim constructive dismissal, and (b) the employee’s employment is terminated some time later for unrelated reasons?

Is an employer able to enforce post-termination restrictions in the employment contract where (a) the employer has previously committed a fundamental or repudiatory breach of that contract, in response to which the employee did not resign and claim constructive dismissal, and (b) the employee’s employment is terminated some time later for unrelated reasons? A repudiatory breach is a breach of contract that goes to the very core of the contract or one that shows that the employer no longer intends to be bound by one or more of the essential terms of the contract. It gives the innocent party the right to treat the contract as being disregarded and entitles the innocent party to refuse to be bound by its terms. If the employer's conduct is in breach of the implied term of trust and confidence, that will inevitably lead to a fundamental or repudiatory breach entitling an employee to claim constructive dismissal (Morrow v Safeway Stores, EAT; Horkulak v Cantor Fitzgerald International). We assume...

See the 8 Q&As about Implied trust