Also known as: direct trusts · express trust
Written by attorneys — see sources below.
An express trust created by the direct and express declaration of the settlor rather than by operation of law or implication. The trust instrument must impose enforceable duties on the trustee for the benefit of identified beneficiaries or purposes.
Daniel Diaz served as personal representative of his uncle's estate. He sold estate real property to his own spouse without court approval or independent appraisal. The sale price fell well below market value, causing a substantial loss to the estate. The court held Daniel liable to the heirs for the resulting damages to the same extent as a trustee of an express trust.
Destiny Davis executed a written instrument directing Diamond Manufacturing to hold ten percent of annual profits in a segregated account for the sole purpose of funding employee retirement benefits. The company later argued the arrangement was merely a contractual bonus plan outside the Uniform Trust Code. The court applied the Code because the instrument created an express trust requiring administration in the manner of an express trust.
Diego Duarte transferred real property to a trustee with directions to manage it and convey the premises to his heirs at law upon his death. The instrument also permitted the trustee to reconvey the property to Diego at any time. While Diego remained alive, his daughter attempted to convey her remainder interest to a creditor. The court held that the daughter possessed no alienable interest because the direct trust remained subject to the settlor's retained power of revocation.
In January 1899, James J. Hanigan conveyed a house and lot in New York City to a trustee. The trust instrument directed the trustee to pay the grantor from the rents and profits the yearly sum of $1,500, with discretion to pay more, and to pay some debts and two existing mortgages on the property. The trustee received powers to mortgage the premises to satisfy liens or carry out the deed's provisions and to sell the property. Upon the grantor's death, the trustee was to convey the premises, if unsold, to the grantor's heirs at law or to pay them the unexpended balance of any sale proceeds. The trustee could also reconvey the premises to the grantor at any time to end the trust. At the time of trial in this action, the grantor remained alive, with two daughters as his sole descendants. In June 1902, one daughter, Mrs. Hughes, executed a deed conveying to her husband all her interest in the real estate. The plaintiffs, who are judgment creditors, later recovered a judgment for more than $4,000 against Mr. and Mrs. Hughes. They brought this action to subject what they alleged to be an interest in the real property to the lien of their judgment. The Special Term ruled in favor of the plaintiffs on the existence of a reachable interest, but the Appellate Division reached a contrary conclusion, leading to this appeal.
View caseDamian Decker's will directed the executor to raze his residence and sell the lot, with proceeds added to the residuary estate. Neighbors sued to enjoin the destruction, claiming it would violate restrictive covenants and create a nuisance. The court refused to enforce the condition because the direct trust imposed a capricious purpose that harmed the community without advancing any settled charitable or private objective.
In 1902, a trust indenture established Kingsbury Place as a private subdivision in St. Louis, with covenants requiring maintenance as desirable residence property of the highest class. The indenture empowers trustees and property owners to enforce its provisions against encroachment or injury. Except for one vacant lot, the subdivision features spacious two and three-story homes used exclusively as private residences. Louise Woodruff Johnston, owner of the house at #4 Kingsbury Place, died on January 14, 1973. Her will directed the executor, Mercantile Trust Co., to cause the home to be razed and the land sold, with proceeds transferred to the residue of the estate. Following Johnston's death, neighboring property owners and trustees for the Kingsbury Place Subdivision filed suit against the executor seeking an injunction to prevent demolition of the house. The plaintiffs contended that razing the home would adversely affect their property rights and the community. During trial, uncontradicted testimony established that the current value of the house and land totaled $40,000, while the empty lot would fetch no more than $5,000 after $4,350 in demolition costs. The St. Louis Commission on Landmarks and Urban Design had designated Kingsbury Place as a city landmark due to its architectural significance. Witnesses testified that demolition would depreciate adjoining property values by an estimated $10,000 and create a break in the urban design continuity. The trial court dissolved the temporary restraining order and ruled against the plaintiffs on all issues. The plaintiffs then appealed the denial of their petition to the Missouri Court of Appeals.
View caseA direct trust requires an express declaration by the settlor that imposes fiduciary duties on the trustee. Resulting and constructive trusts arise by implication or equity without any such declaration.
Yes. The Code applies to all express trusts, charitable or noncharitable, including those created by a settlor's written declaration that requires administration in the manner of an express trust.
Under the Uniform Probate Code, a personal representative who improperly exercises power over estate assets is liable to interested persons for resulting loss to the same extent as a trustee of an express trust.
No. When the settlor retains the power to reconvey the property and terminate the trust, the beneficiary's interest remains subject to that power and is not presently alienable.
Yes. When the trust purpose is capricious and harms the community without serving any settled objective, a court may decline to enforce the condition even though the instrument creates an express trust.
…reach the same conclusion. The direction to the trustee is the superfluous expression of a duty imposed by law. “Where an express trust is created, every legal estate and interest not embraced in the trust, and not otherwise disposed of, shall remain in or revert to, the person creating the trust or his heirs” (Real Prop.…