Title Every Contract is not a trust ✅

Westlaw AI-Assisted Research • Response generated: September 11, 2025 Westlaw Precision. © 2025 Thomson Reuters. No claim to original U.S. Government Works. 1 Jurisdiction: All State & Federal Question 1. There is a “teaching” going around that says everything is a trust. This is not a correct statement. What I have been saying is, “That every express trust is a contract, but every contract is not necessarily a trust.” The statement that "everything is a trust" is incorrect, and the assertion that "every express trust is a contract, but every contract is not necessarily a trust" is legally accurate. Trusts and contracts are distinct legal concepts, though they may overlap in certain circumstances. An express trust can be created through contractual agreements, but not all contracts establish a trust relationship. This distinction is supported by case law and legal principles. Distinctions Between Trusts and Contracts Trusts and contracts differ fundamentally in their formation and nature. A trust is a fiduciary relationship concerning property, where the trustee holds legal title and is subject to equitable duties to manage the property for the benefit of the beneficiary. Trust formation does not require mutual assent or consideration, which are essential elements of a contract. For example, the Supreme Court of Virginia in Boyle v. Anderson emphasized that a trust is not a contract, noting that "the existence of the contract depends on actual acceptance of an offer. It is founded on mutual assent. A trust is in the nature of a conveyance of an equitable interest, and its formation is not dependent on the beneficiary's knowledge or acquiescence" ( Boyle v. Anderson, 301 Va. 52 (2022) ) [1]. Similarly, the Appellate Court of Connecticut in Tunick v. Tunick highlighted that a trust does not rest on an exchange of promises, unlike a contract, and instead requires the transfer of a beneficial interest in property to a trustee ( Tunick v. Tunick, 201 Conn.App. 512 (2020) ) [2]. Characteristics of Express Trusts An express trust is created intentionally by the parties and typically involves a fiduciary relationship with respect to property. Courts have consistently held that an express trust arises from a manifestation of intent to create such a relationship, and no specific language or formalities are required. For instance, the United States Bankruptcy Court in In re Stanifer outlined the elements of an express trust, including sufficient words to create a trust, a definite subject, and an ascertainable object or res ( In re Stanifer, 236 B.R. 709 (1999) ) [3]. Similarly, the Court of Appeals of Washington in Westview Investments, Ltd. v. U.S. Bank Nat. Ass'n stated that an express trust exists when a person accepts possession of property with the understanding that it is to be held and applied for specified purposes, rather than as their own absolute property ( Westview Investments, Ltd. v. U.S. Bank Nat. Ass'n, 133 Wash.App. 835 (2006) ) [4]. Overlap Between Trusts and Contracts While trusts and contracts are distinct, an express trust can be created through a contractual agreement. For example, the Court of Appeals of Washington in Hartford Fire Ins. Co. v. Columbia State Bank noted that express trusts are "those trusts which are created by contract of the parties and intentionally" ( Hartford Fire Ins. Co. v. Columbia State Bank, 183 Wash.App. 599 (2014) ) [5]. However, not all contracts

Westlaw AI-Assisted Research • Response generated: September 11, 2025 Westlaw Precision. © 2025 Thomson Reuters. No claim to original U.S. Government Works. 3 federal bankruptcy court decisions under 11 U.S.C.A. § 523(a)(4). The establishment of fiduciary duties, such as the obligation to segregate trust assets and the prohibition on using trust property for non- trust purposes, is essential to forming an express or technical trust. Technical trusts differ as fiduciary relationships imposed by statute or contract, existing prior to any wrongful act, and are not equivalent to implied, resulting, or constructive trusts. Mere contractual relationships or ordinary business dealings do not automatically create trusts. This body of law clarifies that while every express trust involves contract-like elements, not every contract creates a trust, underscoring the distinct nature and formation requirements of trusts in U.S. state and federal courts. § 35:139. Fiduciary capacity—How relationship created—Express or technical trusts Bankruptcy Desk Guide • 4 Bankruptcy Desk Guide § 35:139 The text delineates the distinction between express or technical trusts and other fiduciary relationships, emphasizing that an express trust requires clear intent, a defined trust res, a trustee, and a beneficiary, established by direct acts often evidenced in writing. It highlights that not every contractual or fiduciary relationship constitutes a trust, and the mere use of terms like "trust" or "entrust" in agreements does not suffice to create a trust. The substance of the parties' relationship, rather than formal labels, governs the existence of a trust, with emphasis on the intent to establish a trust relationship as the pivotal element. Constructive trusts imposed by courts as equitable remedies are differentiated from express trusts and do not have the same legal implications, particularly in bankruptcy contexts. The explanation clarifies that many contracts, including financing and security agreements, do not inherently create a trust absent explicit intent and defining elements. This analysis pertains broadly to fiduciary relationships and trust formation under U.S. law, aligning with state and federal court principles. The above response is AI-generated and may contain errors. It should be verified for accuracy. Cases, statutes, and regulations 1. Boyle v. Anderson Supreme Court of Virginia. • April 14, 2022 • 301 Va. 52 • 871 S.E.2d 226 "...A. A trust is not a "contract.". Beyond this longstanding conception of trusts, contracts and trusts differ in how they are formed. "The existence of the contract depends on actual acceptance of an offer. It is founded on mutual assent. A trust is in the nature of a conveyance of an equitable interest, and its formation is not dependent on the beneficiary's knowledge or acquiescence." Amy Morris Hess, et al., Bogert's Law of Trusts and Trustees S 17 (2021). Additionally, trusts differ from contracts in that "(n)o consideration is required for the creation of a trust. In fact, most trusts are created by gratuitous transfer." Restatement (Third) of Trusts, Introductory Note 1 (2003). Beneficiaries of a trust generally do not provide any consideration to the settlor of the trust...." "...A. A trust is not a "contract.". We conclude that a trust does not qualify as a contract or agreement. Trusts are generally conceived as donative instruments. The Second Restatement of Trusts, carrying forward the language of the first Restatement of 1935, states that "(t)he creation of a trust is conceived of as a conveyance of the beneficial interest in the trust property rather than as a contract." Restatement (Second) of Trusts S 197 cmt. B (1959). The Second Restatement defines a trust as "a fiduciary relationship with respect to property." Id. S 2...."