An express trust is a type of trust that is intentionally created by the owner of property to provide specific instructions for the use of that property for one or more specified purposes. In its broadest application, this type of legal trust can be in the form of a written last will and testament that provides specific instructions on how the assets of the deceased are to be shared among different beneficiaries. As it relates to the establishment of some type of trust fund, an express trust can be an oral statement that is eventually put into the form of a legal document, and used as the basis for creating and managing that fund.
There are many reasons why an express trust may be a good idea. Individuals who wish to provide ongoing financial support for loved ones may choose to create a trust that manages the assets of the provider once he or she is deceased. This approach is especially helpful if the provider suspects that the loved ones in question would have difficulty in managing the inheritance in a responsible manner. When this is the case, the establishment of what is known as a spendthrift trust provides the loved ones with a steady income, but prevents them from withdrawing the entire inheritance at one time and possibly losing it through financial mismanagement.
Other examples of the express trust are commonly found in most nations. A discretionary trust normally designates who may receive disbursements from the trust fund, but leaves the amount and frequency of those payments to the fund administrator or manager. Charitable trusts make it possible to leave property and other assets to a qualified charity. In some instances, it is possible to restrict the use of those funds to specific programs or projects operated by that individual charity. A bare trust is often a good solution when the aim is to provide ongoing support for a minor child or someone who is disabled, since it provides for the establishment of guidelines that the administrator is required to uphold.
Since an express trust is a deliberate act by an owner or settlor to specify how certain assets are to be disbursed or used, the trust can begin in the form of an oral document, but should be recorded at some point. This is because laws regarding oral statements are granted different degrees of standing in various nations. In some areas of the world, establishing the veracity of an oral trust through confirmation by two to three people who heard the settlor express those intentions is as valid as a written document. In other nations, oral statements, even when confirmed by outside sources, do not have the standing of a legally executed legal document.
