An express trust is declared in express terms and arises from voluntary action of the parties, usually in the form of a trust instrument that defines the duties of the trustee and the rights of the beneficiary. When we are discussing trusts, usually we are talking about express trusts. The Trust Law (Division 9 of the Probate Code) applies only to express trusts. Below are a few of the many ways to categorize express trusts.
Private v. Charitable
An express trust is either private, or charitable. A private trust is created to benefit a particular person or a class of persons. A charitable trust, on the other hand, is created to benefit the community at large rather than certain individuals.
While it is essential for a private trust to have a beneficiary, it is sufficient that a beneficiary or class of beneficiaries is ascertainable with reasonable certainty, or that some person holds a valid power to select beneficiaries.
Active v. Passive
An active trust is one where the trustee has active duties. In a passive trust (or “dry trust”), the trustee has no duties or the duties have ended, and the beneficiary can call upon the trustee to terminate the trust by transferring title to the beneficiary.
Inter Vivos v. Testamentary
An inter vivos trust (or “living trust”) is created by the settlor when the settlor is alive. A testamentary trust is created by will and does not take effect until death.
Revocable v. Irrevocable
A revocable trust is one where the settlor retains a power to revoke the trust. Having such a power would also give the settlor the power to modify the trust, unless the trust provides otherwise.
Under our Trust Law a trust is revocable unless the trust instrument expressly makes it irrevocable. An irrevocable trust is one in which the settlor retains no power to alter, amend or revoke. A trust may be permanently irrevocable, or merely irrevocable for a specified period of time.
Revocable and Irrevocable trusts are discussed in more detail in Section IV below.
Special Purpose Trusts
Trusts are at times designed with special, unconventional purposes in mind. They may be formed for tax reasons, for charity, asset protection, or other reasons. Examples: pet trust, incentive trust, gun trust.