Introduction
Trusts play a significant role in property law, equity, and commercial transactions, though the concept may appear counterintuitive to those unfamiliar with legal principles. In essence, a trust arises where one person (the trustee) holds property for the benefit of another (the beneficiary), with enforceable duties and obligations arising from that relationship.
Below are some key principles, definitions, and judicial interpretations of trusts in Nigerian jurisprudence.
What Is a Trust?
In AKINOLA & ANOR v. WEMA BANK PLC (2014) LPELR-24132(CA), the Court of Appeal adopted the definition of trust from Underhill & Hayton’s Law Relating to Trust and Trustees:
“An equitable obligation, binding on a person (who is called a trustee) to deal with property over which he has control (which is called the trust property) for the benefit of persons (who are called beneficiaries) of whom he may himself be one, and anyone of whom may enforce the obligation. Any act or neglect on the part of the trustee which is not authorized or excused by the terms of the trust instrument, or by law, is called a breach of trust.”
Similarly, in JOLUGBO v. AINA & ANOR (2025) LPELR-81175(SC), the Supreme Court explained:
“The trustee is the legal owner but not the ultimate beneficial owner of the property. The beneficiary, though not named in the legal document, is the real owner in the equitable sense.”
Essential Elements of a Trust
The courts have emphasized the three certainties required for a trust to exist:
1. Certainty of intention– a clear intention to create a trust.
2. Certainty of subject matter – the trust property must be clearly identified.
3. Certainty of objects – the beneficiaries must be identified or ascertainable.
In HUEBNER v. AERONAUTICAL INDUSTRIAL ENGINEERING & PROJECT MANAGEMENT CO. LTD (2017) LPELR-42078(SC), the Supreme Court outlined:
“Trust involves three elements:
A trustee who holds the trust property and is bound to deal with it for the benefit of another.
A beneficiary to whom the trustee owes these equitable duties.
The trust property itself, which must be specific.”
This was reiterated in OJO v. FBN (2013) LPELR-23515(CA), where the court underscored that trust property can be real or personal, tangible or intangible.
Creation and Categories of Trusts
In AKINOLA & ANOR v. WEMA BANK PLC (2014), the court stated that:
“Trusteeship cannot be created by insinuation or conjecture. There is always a clear statement creating trusteeship and identifiable property, beneficiaries and trustee clearly identified.”
Trusts may be classified as:
1. Express Trusts:Intentionally created by the settlor.
2. Implied or Resulting Trusts:
Arising from circumstances showing that the transferee is not to benefit personally from the property.
3. Constructive Trusts:Imposed by equity where it would be unconscionable for a person holding property to retain it for themselves.
As held in KWARA STATE POLY MULTI-PURPOSE COOPERATIVE SOCIETY LTD v. ABDULLAHI & ANOR (2021) LPELR-56356(CA):
“Express trusts arise when the owner declares himself a trustee or vests property in another as trustee. Implied or resulting trusts stem from the presumed intention of the owner. Constructive trusts are imposed regardless of intention where equity so demands.”
Resulting Trusts Explained
In ANUMEGE v. ANUMEGE (2014) LPELR-23996(CA), the court extensively explained resulting trusts as a remedy imposed when property is transferred under circumstances indicating the transferor did not intend for the transferee to have the beneficial interest:
“A presumed resulting trust occurs where the transfer fails, and there is no reason to assume it was intended as an outright gift.”
Validity and Conditions
1. For a trust to be valid, it must:
2. Involve specific property.
3. Disclose certainty of subject matter.
4. Reflect the settlor’s intention.
5. Be created for a lawful purpose.
As summed up in YONWUREN v. MODERN SIGNS LTD (2021) LPELR-54656(CA):
“For a trust to be valid, it must involve specific property, certainty of subject matter, reflect the settlor’s intention, and be created for a lawful purpose.”
Trusts remain a cornerstone of equitable relief and property management in Nigerian law, allowing for flexibility in ownership structures and protection of beneficiaries’ rights.
Disclaimer:
This article is for informational purposes only and does not constitute legal advice. Readers are advised to consult a qualified lawyer for advice specific to their circumstances.
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