Legal Definitions - Trust Intent

Trust Intent refers to the clear and genuine desire of an individual (known as the settlor) to establish a trust arrangement.

It signifies that the settlor intends to transfer assets to a trustee, who will then manage those assets for the benefit of specific individuals or purposes (the beneficiaries), rather than making an outright gift or creating a different type of legal relationship. This intent is a fundamental requirement for a valid trust to exist, alongside having specific property, a designated trustee, and identifiable beneficiaries.

Here are some examples illustrating Trust Intent:

• Example 1: Explicit Declaration in a Will

  A grandmother drafts her will, including a clause that states: "I hereby transfer my collection of antique books to my daughter, Eleanor, to hold and manage for the exclusive educational benefit of my grandson, Leo, until he completes his university studies."

  This example illustrates Trust Intent because the grandmother's language clearly indicates she wants her daughter to act as a trustee, holding and managing the books not as an outright gift for Eleanor, but specifically for Leo's benefit and under certain conditions. Her intent to create a fiduciary relationship for Leo's education is evident.

• Example 2: Implied Intent Through Actions

  A parent opens a savings account titled "Sarah Chen, Trustee for David Chen." She consistently deposits money into this account, always referring to it as "David's college fund," and only uses the funds for expenses directly related to David's future education, even though no formal trust document was ever signed.

  Here, Trust Intent is demonstrated by Sarah's consistent actions and the specific titling of the account. Even without a formal written trust, her behavior and the account's designation clearly show her intention to hold and manage these funds for David's specific benefit, rather than as her personal savings or a direct gift to David.

• Example 3: Conditional Transfer of Assets

  An entrepreneur sends a detailed letter to her financial advisor, instructing: "Please take these specific shares of stock and use the dividends generated to support the annual operating costs of the local animal shelter. The principal shares should remain untouched and be passed to the shelter directly upon my passing."

  This scenario shows Trust Intent because the entrepreneur is not simply donating the shares outright. Instead, she is instructing her financial advisor (acting as a trustee) to hold and manage the assets, distribute income for a specific purpose (animal shelter operations), and then transfer the principal under a future condition. This structured arrangement for the benefit of the animal shelter clearly indicates an intention to create a trust-like relationship.