Executory trust meaning

An executory trust arises where a will, contract (for example, marriage articles) or deed shows an intention to create a trust but directs the trustees to execute a later, more formal instrument (a settlement or deed) that will define the detailed trusts. The initial instrument is not the final declaration of beneficial interests; it requires further steps to perfect the trust. This is a descriptive, case law expression rather than a statutory definition. Key features include: beneficiaries have an equitable right to compel execution of the contemplated settlement; the court can settle the terms if trustees do not; and, on construction, equity is readier to mould the later settlement to give effect to the settlor’s general intention than it would be with an “executed” trust (where the interests are already fully defined). Typical contexts are older marriage settlements and testamentary directions, but the concept can apply wherever a document contemplates a future trust instrument. The usage and effect are broadly consistent in England and Wales, Northern Ireland and Ireland. Scots law recognises the analogous situation where a trust deed requires a further deed or conveyance, focussing on completing the trust purposes rather than a rigid executed/executory distinction.