CLASSIFICATION OF TRUSTS

CONTENTS

1.0    Introduction

2.0    Objectives

• Main Content
• Classification of Trusts

4.0    Conclusion

5.0    Summary

6.0    Tutor-Marked Assignment (TMA)

7.0    References/Further Readings

INTRODUCTION

In virtually all jurisdictions, trusts are classified into various types and the law of trust in English law and consequently in Nigeria are no exception. The classification or types of trusts sometimes aid in understanding the purpose or object of the trust.

OBJECTIVES

In this Unit, you will be introduced to the classification of trusts and  the  underlying factors for this categorization. Classification is also instrumental to formalities, consequences and achieving purpose of that trust. At the end of this Unit, you should be able to:

• Understand the different classification of trusts
• Describe the relationship between private and public trusts
• Explain the relevance of classification of trusts

MAIN CONTENT

Classification of Trusts

Classifying trusts is a bit an uneasy task and classification varies according to the classifiers. A distinctive feature of classification of trusts is according to use or object. Hence, most names of trusts are reflective of their purposes or objects. A first and major classification of trusts is into private, public or charitable trusts. Private trust is one that is meant to benefit an individual or a group or people. Public or charitable trust on the other hand is one that is structured to benefit the general public or a section of it. However, while a charitable trust is always a  public trust, not all public trusts are charitable trusts.

Trusts are further divided into other compartments of express, constructive, implied, resulting trusts, ministerial or instrumental trusts and discretionary trusts. Irrespective of the classification of trusts into different classes, a distinctive difference to note in the various classifications is between those trusts that are created by the act of the parties and those that evolved by virtue of the operation of law. Flowing from this, trusts that are created by the act of the parties are referred to as express trusts while those that evolved by operation of law are called implied trusts.

SELF ASSESSMENT EXERCISE (SAE) 1

What is the difference between private and public trusts?

CONCLUSION

Classification of trusts is helpful in understanding the various types of trusts and also a reflection of the purpose and object of the trusts.

SUMMARY

In this Unit, you have learnt about the different classifications of trusts and that such categorization varies according to the classifiers. You also learnt about that a distinctive feature of the classification is according to purpose or object of the trusts. We also discussed private and public trusts, and those trusts  created by act of the parties and those which evolved through operation of law. In the next Unit, you will be introduced to the requirements of trusts.

TUTOR-MARKED ASSIGNMENT (TMA)

The classifications of trusts are a reflection of the purpose and object of the trusts. Discuss.

REFERENCES/FURTHER READINGS

Fabunmi, J.O. (2006). Equity and Trusts in Nigeria. Ile-Ife: Obafemi Awolowo University Press Ltd.

Jegede, M.I. (1999). Law of Trusts, Bankruptcy and Administration of Estate.

Lagos: MIJ Professional Publishers Limited.

The Free Dictionary, Trust, Retrieved September 3, 2010  from http://legal-dictionary.thefreedictionary.com/trust.