Intrust law, asettlor is a person whosettles (i.e. gives into trust) theirproperty for the benefit of thebeneficiary. In some legal systems, a settlor is also referred to as atrustor, or occasionally, agrantor ordonor.[a] Where the trust is atestamentary trust, the settlor is usually referred to as thetestator. The settlor may also be thetrustee of the trust (where he declares that he holds his own property on trusts) or a third party may be the trustee (where he transfers the property to the trustee on trusts). In thecommon law ofEngland and Wales, it has been held, controversially, that where a trustee declares an intention to transfer trust property to a trust of which he is one of several trustees, that is a valid settlement notwithstanding the property is notvested in the other trustees.[1]
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 tominors 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 aninter vivos trust over personal property, but there are often formalities associated with trusts overreal property,[b] ortestamentary trusts.[c] 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 on behalf of the beneficiary; a general intention to benefit another person on its own is sufficient.[d] These formalities apply toexpress trusts only, and not to resulting, implied orconstructive trusts.
For a settlor to validly create a trust, in most common law legal systems they must satisfy the three certainties, established inKnight v Knight:
Where a settlement of property on a third party trustee by a settlor fails, the property is usually said to be held onresulting 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 takes the property absolutely.[2]