In the affairs of men, there have been circumstances where out of necessity, one person has had to transfer property to another person for the benefit of a third party (Beneficiary). This relationship is referred to as a Trust. The concept of a Trust is said to have been in existence as far back as the Roman era, when soldiers before leaving for war entrusted their properties in the hands of trusted friends for the upkeep of their family. The concept is recognized to have been developed under the English common law as one of the remedies to the rigidity of the common law. 

This article seeks to briefly examine the general concept of a Trust, paying particular attention to the statutory provisions and case law governing trusts in Ghana.



Generally, a Trust is an arrangement where one party (“Party A) reposes faith in another with the belief that the other executes party A’s wishes in relation to a third party. 

According to Underhill and Hayton Law of Trusts and Trustees 14th Edition, a Trust is an equitable obligation, binding a person (who is called a Trustee) to deal with property over which he has control (which is called a Trust Property) for the benefit of persons (Beneficiaries or Cestui que trust) of whom he may himself be one, any one of whom may enforce the obligation.

In the case of Soon boon Seo v Gateway Worship Centre [2009] SCGLR 278, the Supreme Court adopted the definition given by B. J. da Rocha and C. H. K. Lodoh, in their book “Ghana Land Law and Conveyancing (2nd Edition)” at pages 105-106 wherein they defined Trust as a concept in equity whereby one person (called the Trustee”) holds the nominal or legal title in property which has been made available to him by another person (called “the Settlor”) for the benefit of some other person (called “the Beneficiary”).


  1. Settlor: A Settlor is a person who, under Trust law, settles property for the benefit of Beneficiaries. A Settlor may also be referred to as a Trustor, Grantor, or Donor in some legal systems. Where the Trust is created by a Will (Testamentary Trust), the Settlor is known as the Testator. The Settlor may also be the Trustee of the Trust (by declaring that he holds his own property on Trusts), or a third party may be the Trustee (where he transfers the property to the Trustee on Trusts). A Settlor may establish a trust by manifesting an intention to do so. In most countries, no formalities are required to establish a Trust over personal property, but formalities are frequently associated with trusts over real property or testamentary Trusts. The Settlor’s words or actions must be sufficient to establish an intention that another person or the Settlor himself will be Trustee of the property on behalf of the beneficiary; a general intention to benefit another person is sufficient on its own.
  2. Beneficiary: A Beneficiary is the person or persons who are entitled to the benefits of a Trust arrangement. A natural person is usually the Beneficiary of a Trust, but it is perfectly possible for a company to be the Beneficiary of a Trust, and this happens frequently in sophisticated commercial transaction structures.  All Trusts, with the exception of charitable Trusts and some specific anomalous non-charitable purpose Trusts, must have ascertainable Beneficiaries. 

In general, there are no restrictions on who can be a Beneficiary of a Trust. A Beneficiary can be a minor or someone with a mental disability (in fact many Trusts are created specifically for persons with those legal disadvantages).

  1. Trustee: A Trustee is a person or entity who holds and manages property or assets for the benefit of another person or entity. A Trustee may be appointed for a variety of reasons, including bankruptcy, a charity, a Trust fund, or certain types of retirement plans or pensions.
  2. Fiduciary relationship: Fiduciary duties are duties enforced by law and imposed on persons in certain relationships requiring them to act entirely in the interest of another, a Beneficiary, and not in their own interest (David J. Seipp, Trust and Fiduciary Duty In The Early Common Law (2011) at page 1011).



In Ghana Trusts are generally regulated by:

  1. The Charitable Trusts Act 1869
  2. Trustees Incorporation Act 1962 (Act 106)
  3. The Securities Industries Act 1993 (PNDCL 333)
  4. The Common law (Article 11(1) of the 1992 Constitution of Ghana)

The Trustees (Incorporation) Act, 1962 (Act 106) allows Trustees of unincorporated voluntary associations and bodies formed for religious, educational, literary, scientific, sporting, social, and charitable purposes to be incorporated and acquire immovable property. Following incorporation, the Trustee(s) are the only people who can sue and be sued in the name of the association.

Registered Trustees are given a certificate that includes information such as the qualification and number of Trustees, the method of appointing new Trustees, the custody and use of the official seal, the amount of immovable property the Trustees may own, and the purpose for which the acquired lands may be used.



In the case of Cofie v Forson ([1992] 1 GLR 312), the court held that creating a Trust requires certainty of intention, certainty of subject matter, and certainty of object (“the three certainties”) to be valid. This means the Settlor must have shown a clear intention to create a Trust, which can be fairly gathered from the Settlor’s expression or his conduct.   In Asante v University of Ghana ([1972] 2 GLR 86), it was   held that, when creating a Trust, no particular word would be required, provided the intention to create one can be gathered from the expressions used by the Settlor.

Regarding subject matter, Justice Adjei in his book, “Land Law, Practice and Conveyance in Ghana”, stated that “the subject matter of a Trust must be well described to make it identifiable. Where the identity of the subject matter cannot be ascertained, it may defeat the purpose of the Trust.” 

Finally, the intended Beneficiaries of a Trust must be certain, otherwise the trust is void (Morice v Bishop of Durham ([1805] EWHC CH J80). 

 Trusts must be enforceable, so there must be someone who can enforce the Trust (unless it is a charitable Trust, where the Attorney-General can bring an action).



  • Private and Public:
  1. Private Trust: A Trust established for the benefit of a single person or a group of people. It can normally be enforced by any of the Beneficiaries. It could be either express, implied, constructive, or resulting. Again a Private Trust could either clearly state the obligation of the Trustee (Perfect Obligation Trust) or be vague as to the obligations of the trustee (Imperfect Obligation Trust). 
  2. Public Trust: Charitable Trusts are another name for public Trusts. It is one whose primary goal is to promote public welfare, even if it may benefit an individual or a group of individuals incidentally. If the object of the Trust is obsolete, impracticable, or uncertain, or if it may fail, the court will apply the cy pres doctrine to determine the closest purpose resembling the original Trust, to ensure that the Trust does not fail. It is enforced on behalf of the State by the Attorney General.
  • Express or implied
  1. In an express or simple Trust, a Trustee holds legal title to assets on behalf of a Beneficiary who has absolute and immediate access to the assets. Typically, the Trustee would have no active duties to perform. Although express Trusts can be formed orally, they are usually established through the use of a simple document known as a ‘Declaration of Trust.’

Express Trusts are commonly used to transfer assets to minors who lack legal capacity to deal with those assets. They can also be useful if an individual wishes to acquire shares without that acquisition becoming public knowledge. For tax purposes, Express Trusts are ‘looked through,’ which means that the Beneficiary, rather than the Trustee, is liable for any taxes arising from the Trust (Section 56 of the Income Tax Act 2015 (Act 896).

  1. Implied Trust: this does not arise as a result of the intention of the parties but is rather inferred from the conduct of the parties involved. It is sometimes referred to as Presumptive Trusts. 
  • Completed Constituted & Incompletely Constituted.

Completely Constituted Trust: A Trust is completely constituted where the Settlor has done everything within his power to convey the property to the Trustee to hold it for the Beneficiary. The effect of a completely constituted Trust is that the Beneficiary can enforce the Trust irrespective of the fact that she has not provided any consideration to the Settlor’s promise as captured by the Trust instrument. According to da Rocha and Lodoh (supra) (2nd Edition) at pages 105-106, a Trust may be completely constituted in two ways:

  1. by the Settlor conveying the property to the Trustees; or
  2. by the Settlor declaring himself to be a Trustee for the intended cestui que trust.
  1. Incompletely Constituted:  This occurs where the title to the Trust property has not been transferred into the Trustee’s name. Beneficiaries may not be able to enforce them if they are not properly vested, unless the Beneficiary in question has provided valuable consideration. Typically, an incompletely formed Trust necessitates further action by the Settlor before it can be said to be “perfectly formed”(Milroy v Lord [1862] EWHC J78).
  • Executory & Executed
  1. Executed Trusts:  It is an Express Trust which the Testator or Settlor has marked out in appropriate technical expressions the interest to be taken by each Beneficiary. Here, the testator or Settlor is his own draftsman. And in this case, no further instrument is necessary, but the Trust is finally declared at the time of its creation.
  2. Executory Trusts: It occurs when the Settlor or Testator establishes a Trust in favor of Beneficiaries, and while he may indicate a scheme for settlement, the details are left to the Trustees to fill. The quantum of each Beneficiary’s interest may be left out to be settled later. e.g. In a Will, the testator may convey a house for his children without setting out the respective rooms or interests. 
  • Constructive and Resulting
  1. Constructive Trust: This occurs when equity considers and treats the legal owner of a property as a Trustee, although no Trust has been formally made. Typically, the individual may have attempted to take advantage of his position in order to acquire a legal interest in a property, for instance someone who uses another person’s money to buy a property in his own name or a Trustee who renews a lease in his own name. Its goal is to prevent unjust enrichment. According to Justice Dennis Adjei, the court imposes Constructive Trust on a person who has wrongfully acquired property. Constructive trust is also referred to as involuntary trust or trust of son tort. 
  2. Resulting Trusts: This type of Trust is also referred to as a remedial Trust. The benefit of a Resulting Trust is returned to the estate if the Settlor dies. Typically, it is difficult to distinguish Implied Trust from Resulting Trust because in both cases, the intention to create a Trust is only assumed. However, in the case of a Resulting Trust, the Beneficial interest reverts to the Settlor or the person who provided the funds for the purchase of the property or conveyed the property. However, in the case of an Implied Trust, this may not be the case. 

In Re Koranteng (Dec’d); Addo v. Koranteng and Others as referenced in Margaret Osei Assibey v. Joyce Gbomittah suit number No. J4/51/2011, the learned judge stated as follows:

“In essence, a resulting trust, in this context, is a legal presumption made by the law to the effect that where a person has bought property in the name of another, that other will be deemed to hold the property in trust for the true purchaser. It is a trust implied by equity in favor of the true purchaser of the estate, if he has died. The trust is regarded as arising from the unexpressed or implied intention of the true purchaser. Obviously, though for such a resulting trust to be implied, certain factual preconditions must exist and the issue is whether on the facts of the current case, a resulting trust may validly be implied. In the context of this case the main factual precondition is proof that the beneficiary of the resulting trust advanced the purchase money for the transaction. Thus, for a resulting trust to be established, there has to be proof that the purchase money was advanced by the beneficiary of the resulting trust ([1995-96] 1 GLR 252 – 270).” 


    1. Fixed Trusts is an instrument that specifies the beneficial interest each Beneficiary is to receive.
    2. Protective Trust is usually a Trust for life or some lesser period, which is intended to be determinable on the happening of specified events
    3. Discretionary Trusts leave some discretion to be exercised by the Trustees, for example, who will benefit, nature of the benefit etc.
  • Trust in a higher and lower sense
  1. The phrase Trust in the higher sense has been used to refer to, e.g. A government duty which is not enforceable in the courts. Example: the Bank of Ghana and DKM story, and the government of Ghana’s promise to release monies to victims.
  2. A Trust in the lower sense is based on an equitable obligation which is fully enforceable in the law courts (Tito v. Waddell (No. 2) [1977]. 



  1. Power of sale (Either by a private contract or public auction or according to the mode of sale as prescribed by the Trust Instrument).
  2. Power to issue receipts for payments made in respect of the Trust Property.
  3. Capacity to sue and be sued in respect of the Trust Property (Order 4 Rule 13 of the High Court (Civil Procedure) Rules, 2004 (C.I. 47).
  4. Power to insure the Trust Property, even though the mere failure to insure will not amount to a breach, unless it can be shown that the Trustee did not exercise reasonable care of the property. 
  5. Power to compound liabilities – Enter into a compromise, accept composition for debts and agree on time to pay the debts.
  6. Power to appoint delegates by appointing agents when necessary, especially when specialized knowledge and expertise is required. 



  1. Duty to account to Beneficiaries as to all reasonable information of how the Trust Property has been dealt with or invested.
  2. Duty to allow Beneficiaries inspect all title deeds and documents relating to the Trust. And if they are in doubt, they may apply to the court for direction.
  3. Duty of loyalty:  Trustee has a duty of undivided loyalty to the Beneficiaries. He is not to engage in self-dealing and must avoid conflict of interest in the management of the Trust property.
  4. Duty of impartiality:  Where there is more than one Beneficiary, he is to give due attention to each of the Beneficiaries’ interest.
  5. Duty not to commingle the Trust Property or assets with his personal property or assets.
  6. Duty to carry out the directions of the Trust as contained in the Trust Instrument.
  7. Trustee is to secure the settled property, by immediately taking possession without delay.



The general rule is that other than the agreed compensation for their service, Trustees are not permitted to profit directly or indirectly from the Trust. This is because Trustees are in a fiduciary relationship with the Beneficiaries and must protect and seek their interest with unquestionable commitment. The rule is primarily to ensure that Trustees do not fall into the temptation of having a conflict of interest because a Trustee who is allowed to profit personally may not act in the best interest of the Trust (Keech v. Sandford [1726]).  



In some cases where Trustees were sued for breaching Trust, these are some defenses that were accepted by the courts: 

  1. Acquiescence and Release – When the Beneficiaries have acquiesced or freed the Trustee, either expressly or by necessary inference by their conduct, such as failing to institute an action within the requisite time limit. Infants who are Beneficiaries cannot provide a valid release unless they misrepresent their ages. If there are numerous Beneficiaries and only one acquiesced, the others may sue the Trustees for their shares, subject to the Trustee obtaining indemnification from the one who acquiesced.
  2. Consent by the Beneficiaries –  When the Beneficiary consents to the breach, the legal principle volenti non fit injuria (a person who consented to, or participated in, the infliction of injury to himself, cannot be heard subsequently to complain of his injuries), unless
  1. He lacked capacity
  2. He was not aware of the full facts and 
  3. He was induced to do so (Undue Influence).
    1. Lapse of time – Under the Limitation Decree, NRCD 54, Section 15, an action for breach of Trust cannot be instituted after 6 years.
  • Bankruptcy – A bankrupt Trustee is ordinarily immune from suit for personal liability for decisions taken or acts done with regards to a judgment against the Trust Property or an act or decision taken pursuant to a statute.



Both following and tracing are remedies that are used to recover property which has been transferred or disposed of by a Trustee. Following is available at common law, whereas tracing is an equitable remedy.

The common law only follows and recovers property only where it is physically identifiable and not mixed up with other monies, but equity may trace a property even when it has changed its form. At common law, there is no need to establish a fiduciary relationship before following can be done; but in equity, one cannot do tracing where there is no fiduciary relationship. 

 Three conditions must be present to trace Trust Property, 

  1. The property must be traceable
  2. There must be an equitable title to the property to be traced (Not necessary under common law).
  3. Tracing must not produce an inequitable result



In essence a Trust is one of the legal innovations by which a person can entrust his wishes to another to carry out for the benefit of a third party. However, unlike a Will, a Trust need not take effect upon the death of a Settlor. The formalities associated with the creation of a Trust is not as cumbersome as other legal instruments such as a Will or a deed of conveyancing. A Trust imposes an obligation on the Trustee so as to ensure that the interest of the Beneficiary is protected.

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