When is a trust formed? High Court considers the essentials of trust creation

Writing for Law News New Zealand, Tony Pearce considers a recent High Court decision that has offered a useful reminder of one of the fundamental questions in trust law: when does a trust actually come into existence?

In Ludlow Trust Company Limited v John Homfray [2026] EWHC 1107 (Ch), Judge Paul Matthews considered the construction of a settlement in the context of a Part 8 claim concerning the proposed distribution of a trust fund. Although the case arose from a specific application, the judgment is notable for its wider discussion of the point at which a trust is formed under English law.

Judge Matthews, a resident Chancery judge authorised to sit in the High Court and a recognised author on trusts and estates, approached the question by returning to first principles. In particular, he examined the idea that a trust cannot arise unless there is first property capable of being held on trust. As he put it, a trust arises when the trust obligation first engages the conscience of the owner of the asset. Without an asset, there can be no trust obligation and therefore no trust.

The judgment also considers the position where a trust is intended to affect future property. In those circumstances, even where a trustee has promised for value to hold property on trust when it comes into their hands, the trust will only arise once the property is actually received. This reflects the established principle summarised in the phrase: “no asset, no trust”.

For practitioners, the decision is a helpful restatement of the relationship between trust obligations and property rights. Judge Matthews observed that, whatever the theoretical analysis, trust law is for practical purposes a branch of property law. That observation is important because it underlines the need to identify both the relevant asset and the point at which the trustee’s obligations become enforceable.

The decision also revisits familiar authorities, including Milroy v Lord, Keech v Sandford, Re Hallett’s Estate and Re Goldcorp Ltd, as part of a broader discussion of how trust obligations arise, whether by declaration of trust or by transfer of property to a trustee. It also includes a reference to Doonen Ltd v Mond, drawing on the interaction between English trust law and principles with a Scottish and Roman-law background.

Read Tony’s full analysis here: England and Wales High Court considers the question of when a trust is formed