What are the 3 certainties needed to create a valid trust?
For a trust to be valid, the settlor must consider three certainties before settling:
1. Certainty of intention: This means that settlor must have a clear and unambiguous intention to give up and transfer asset with genuine purposes. If the Court found that the settlor’s intention is not clear or misleading, the certainty of intention will be breached and the trust will become invalid (As shown in Official Assignee v Wilson & Clyma).
2. Certainty of subject: To satisfy this requirement, the subject matter in the trust should be clearly named and transferred from settlor to trustee. It could be any property, asset, cash, bank account, share or dividend.
3. Certainty of object: This means that the trust must have one or more named beneficiary and trust will be there for the benefit of beneficiary. If there is no clear beneficiary, then the trust will be created for no purpose and thus, it will be invalid.
It is important that settlor needs to make sure to satisfy all three certainties before settling a trust.