Capacity to be a trustee is generally co-extensive with the ability to hold and dispose of a legal or beneficial interest in property. In practice, special considerations arise only with respect to minors and mentally incapacitated persons.
A settlor may create a trust by manifesting an intention to create it. In most countries no formalities are required to create an inter vivos trust over personal property, but there are often formalities associated with trusts over real property, or testamentary trusts. The words or acts of the settlor must be sufficient to establish an intention that either another person or the settlor himself shall be trustee of the property the beneficiary; a general intention to benefit another person on its own is sufficient. These formalities apply to express trusts only, and not to resulting, implied or constructive trusts.
For a settlor to validly create a trust, in most common law legal systems they must satisfy the three certainties, established in Knight v Knight:
Where a settlement of property on a third party trustee by a settlor fails, the property is usually said to be held on resulting trusts for the settlor. However, if a settlor validly transfers property to a third party, and the words used are held not to create a trust, the usual rule is that the donee take the property absolutely.
The Power of Revocation of A Settlor of A Discretionary Trust, May Be Considered as A Property Right, Available to A Single Creditor, by Way of Equitable Execution
Jul 11, 2012; In the TASSARRUF MEVDUATI SEGORTA FONU -v- MERRIL LYNCH BANK AND TRUST COMPANY (CAYMAN) LTD & OTHERS (2011) UKPC 17, the Privy...