Appleby Guernsey Trustee Knowledge Series: Foundation Paper 2

Requirements for a Valid Trust

Trusts² can be established orally, in writing or by conduct (s.6 of the 2007 law), and may be established during a settlor's lifetime (an inter vivos trust) or upon death under the terms of the settlor's will (a testamentary or will trust). Regardless of how a trust is established, the following requirements must be met so that a trust is not declared invalid with the result that the assets revert back into the settlor's estate:

Certainty of Subject Matter

The trust property must be clearly identified. For example, a declaration that a trust is to contain "the bulk of my estate" is insufficient.

Certainty of Objects

It must be possible to determine who the beneficiaries (the objects) are. For "fixed" trusts it must be possible to identify all the beneficiaries in person, but for "discretionary" trusts it must be possible for the trustees to say if the beneficiary comes within a class of identifiable potential beneficiaries.