Define: The “Three Certainties”

“The Three Certainties” is a legal principle in contract law that outlines the requirements for the creation of a valid express trust. According to this principle, for a trust to be valid, three essential elements must be present: certainty of intention, certainty of subject matter, and certainty of objects.

Certainty of Intention: The settlor (the person creating the trust) must demonstrate a clear and unequivocal intention to create a trust. This intention must be expressed in language that indicates an intention to create legal rights and obligations, rather than merely expressing a wish or hope.

Certainty of Subject Matter: The trust property, also known as the trust res, must be clearly identified and described with sufficient certainty so that it can be distinguished from other property. This ensures that the trustees know what property they are holding on behalf of the beneficiaries.

Certainty of Objects: The beneficiaries or objects of the trust must be clearly identified or ascertainable. The beneficiaries can be individuals, groups, or charitable purposes, but they must be sufficiently defined or capable of being determined with certainty at the time the trust is created.

These three certainties serve as fundamental requirements to ensure the validity and enforceability of trusts and provide clarity and predictability in the administration of trust property. If any of these certainties are lacking, the trust may be deemed invalid or unenforceable by the courts.

In order for a trust to exist three conditions must be satisfied, generally referred to as the “three certainties” (Knight v Knight (1840)).

• ‘Certainty of Intention’ it must be the intention of the settlor to create a trust, as opposed to a gift or power. Equity looks to substance, not form, and for this reason, there must be a clear intention to (i) separate legal and equitable ownership of the property and (ii) impose the obligation of trusteeship on the holder of the legal title. In order to convey this intention within the trust instrument, the settlor must use imperatives rather than precatory words.
• ‘Certainty of Subject Matter’ the property subject to the trust needs to exist at the time of the trust’s creation, whether that property is in the form of land, goods, stock shares, money, debts, etc. Future property cannot be the subject of a trust. However, property not yet vested in the settlor (e.g. absolute entitlement to property that will vest when the settlor reaches a certain age) can be the subject of a trust.
• ‘Certainty of Objects’ the nature of this requirement will vary depending on whether the trust is fixed or discretionary. A fixed trust specifies beneficiaries either by name or definite class. The extent of the benefit, as well as the distribution scheme, will also be specified, leaving no discretion to be exercised on the part of the trustee. With the exception of charitable trusts, the objects must be living human beings. This is a result of the beneficiary principle, which requires that the object be someone with locus stand, i.e. the legal capacity to apply to the court for enforcement of the trust.

For further discussion see certainty of intention, certainty of subject matter and certainty of objects.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March, 2024.