Definition
The term express trust refers to an agreement which is created in precise terms and typically takes the form of a written document. Express trusts are oftentimes used to preserve wealth.
Explanation
An express trust is any agreement that is derived from the well-documented wishes of the donor, or settlor. This type of trust is the inverse of an unexpressed trust, which is inferred from the law or a pattern of dealings with other parties. An express trust will always have the following elements:
Settlor / Donor: also known as a grantor, this is the person that creates the agreement and donates the assets to the trust.
Purpose: all trusts must include a legal purpose to be considered valid.
Trust Assets: this includes both intangible as well as tangible assets.
Trustee: maintains the assets on behalf of the donor and fulfills the obligations to the beneficiaries.
Beneficiary: the entity that derives a benefit from the trust's assets.
Any trust that contains the above elements is classified as an express trust. Revocable trusts, irrevocable trusts, discretionary trusts, and charitable trusts are all examples of express trusts.
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