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In general, a trust is formed when the legal owner (or owners) (see: Trustee) is obliged to hold it for the benefit of some other person, or group of people (the 'objects', or beneficiaries; see: Objecttrust, Beneficiary). A trust may be formed when, for example, the beneficiary cannot legally own the property. Trusts can be loosely classed into four metas.
- An Express trust, intentionally created by a person out of his right of ownership
- A Resulting trust, arising by operation of law in connection with an express trust (e.g., where the express trust fails)
- A Constructive Trust, arising by operation of equity in a variety of other situations.
- A Statutory trust, which arises by virtue of the application of a particular statute
The trustee is the legal owner of the property, and has full legal rights of ownership. He can, for example, sell or raise a mortgage on the property. However, the equitable interest of the beneficiary is not disturbed, and the new owner of the property will take it subject to those interests (but see: Bona fide purchaser without notice).
A trust will generally impose some duties on the Trustee, if only a duty to allocate the proceeds to the beneficiaries. A duty may be personal, that is, offered to and accepted by a specific individual, or a Duty virtute officii.
In general, the trustee of an epxress trust has a Fiduciary duty to the beneficiaries, and the beneficiaries can seek to enforce that duty in the courts.