Picture the exam room. You are 140 questions into FLK2, tired, and a Single Best Answer stem drops a testator who wrote "I leave my money to be shared among my old friends". The question asks whether a valid trust arises. Four options stare back, all plausible. If you cannot separate certainty of intention from certainty of objects in about ninety seconds, you will guess. And guessing on Trusts costs marks across a big slice of the FLK2 paper.
This is the part of Trusts Law that examiners love, because it is rule-heavy and easy to test. Let me walk you through how an express private trust actually comes into being for England and Wales — and, more importantly, what to do with that knowledge when the clock is running.
Why the creation of a trust matters for SQE1 FLK2
Trustee duties and breach get a lot of attention, but a great many FLK2 questions never reach that stage. They stop earlier, at a simpler point: was a trust ever validly created? If the answer is no, there is nothing to breach and no beneficiary to protect. The property either stays with the settlor, results back to them, or passes under a will's residue.
So the first mental move in any Trusts question is to ask: has a valid trust been constituted at all? Three ingredients must be present — the three certainties, the correct formalities, and proper constitution. Miss any one and the structure collapses. The classic authority for the certainties is Knight v Knight (1840), refined by later cases you should be able to name.
Certainty of intention: did the settlor mean to impose a trust?
The court looks for an intention to create a binding obligation, not a mere hope or moral wish. No magic words are needed — you do not need to see the word "trust" anywhere. Equally, using the word "trust" does not guarantee one exists. What matters is substance.
Contrast two well-known lines of authority. In Paul v Constance [1977] the words "the money is as much yours as mine", repeated in context, were enough to show a trust of a bank account. But so-called precatory words — "in full confidence", "in the hope that", "feeling sure that" — usually fail. Lambe v Eames (1871) and Re Adams and the Kensington Vestry (1884) show that a gift dressed up with a wish attached is often just a gift, with the recipient free to do as they please.
Exam tactic: when you see precatory language in the stem, your default hypothesis is no trust — an outright gift. Then check whether anything in the facts pushes back towards a binding obligation. The examiner is testing whether you can resist being fooled by comforting language.
Certainty of subject matter: what property, and what share?
Two things must be certain here. The trust property itself, and the beneficial interest each beneficiary takes.
On the property, vague descriptions kill the trust. "The bulk of my estate" failed in Palmer v Simmonds (1854) because "bulk" cannot be measured. Compare tangible and intangible assets, because the SQE loves this distinction. In Re London Wine Co (1986) a trust of unascertained bottles of wine failed — nobody could say which specific bottles were held on trust. Yet in Hunter v Moss [1994] a trust of 50 of the settlor's 950 identical shares succeeded, because shares of the same class are interchangeable and identical, so segregation was unnecessary.
Hold those two cases side by side in your memory. Physical goods generally need to be separated out; intangible identical assets such as shares of one class often do not. If a question puts wine, gold bars or livestock in front of you, think Re London Wine. If it puts ordinary company shares, think Hunter v Moss.
On the beneficial shares, if the settlor says "a reasonable income" the court may be able to apply an objective standard, as in Re Golay's Will Trusts [1965]. But "some of my paintings to X" with no way of identifying which paintings will fail. Where subject matter is uncertain, the property typically stays with the settlor or their estate.
Certainty of objects: who are the beneficiaries?
Here the test depends on the type of trust, and this is where careless candidates drop marks. Learn the split cleanly.
For a fixed trust — where the shares are set in advance — you need a complete list of every beneficiary. This is the complete list test from IRC v Broadway Cottages (1955). If you cannot name them all, the trust fails, because the trustee cannot divide the fund.
For a discretionary trust — where trustees choose who benefits and how much — the test is different and more generous. Following McPhail v Doulton [1971], you apply the is or is not test: can it be said with certainty whether any given individual is or is not a member of the class? You do not need a full list. A class such as "employees and former employees and their relatives and dependants" can work.
Watch for the "conceptual" versus "evidential" uncertainty trap tested in Re Baden (No 2) [1973]. A class described by a vague concept — "my good friends" — fails for conceptual uncertainty. A conceptually clear class — "my first cousins" — survives even if you cannot immediately locate every member on the facts.
One more layer worth a quick note: even a class that passes the "is or is not" test can be void if it is administratively unworkable, or the trust may fail for capriciousness. So identify the type of trust first, then pick the matching test. Getting the test wrong is the single most common Trusts error I see in mock scripts.
Formalities and constitution: putting the trust into effect
Certainties are only part of the story. The trust must also satisfy any formality rules and be properly constituted.
For a declaration of trust over land, section 53(1)(b) of the Law of Property Act 1925 requires evidence in writing signed by the person declaring the trust. Note the wording: the trust need not be created in writing, but it must be evidenced by signed writing, or it is unenforceable. A purported disposition of a subsisting equitable interest must comply with section 53(1)(c). Personalty — money, chattels, shares — can be declared on trust orally, subject to the certainties.
Constitution is about transferring title. Where the settlor declares themselves trustee, no transfer is needed — they already hold the property. Where the trust depends on transferring property to a separate trustee, that transfer must be completed using the correct method for the asset (a deed for land, stock transfer form and registration for shares, and so on).
The governing principle comes from Milroy v Lord (1862): equity will not perfect an imperfect gift, and will not treat a failed transfer as a self-declaration of trust. There are limited softening rules — the "every effort" principle in Re Rose [1952], where the settlor has done everything required of them and completion rests with a third party, and the unconscionability approach in Pennington v Waine [2002]. Know these as narrow exceptions, not the general rule.
Quick decision tree for exam speed: (1) Intention? (2) Subject matter? (3) Objects — fixed or discretionary, correct test? (4) Formalities under s.53 if land or equitable interest? (5) Constituted — self-declaration or transfer completed? Run these five checks and most Trusts SBAs answer themselves.
Resulting and constructive trusts: the fallback questions
When an express trust fails, or when someone contributes to property without a formal declaration, equity often steps in. An automatic resulting trust can arise where an express trust does not exhaust the beneficial interest — the surplus results back to the settlor. A presumed resulting trust may arise on a voluntary transfer or contribution to purchase price, though the presumption can be rebutted by evidence of a gift or loan.
Constructive trusts appear in the family home context, where cases such as Stack v Dowden [2007] and Jones v Kernott [2011] govern how the beneficial interest in co-owned property is quantified based on the parties' common intention. You do not need to write essays on these for FLK2, but you must recognise which type of trust a question is really about. Label it correctly and the rest follows.
How to revise Trusts creation efficiently
Do not just read the cases — drill them against MCQs until the tests are automatic. Build a one-page grid: certainty, the rule, the leading case, and the "what if it fails" consequence. Then practise spotting precatory words in isolation, because that single skill unlocks a surprising number of questions. Finally, rehearse the five-step decision tree above until you can run it under pressure.
Takeaway: a Trusts SBA is rarely asking you to be creative. It is asking whether you can identify the trust type and apply the right test in the right order, quickly and calmly.
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