Definition
An executory trust is a trust that has been declared or created but remains incomplete — some further act by the settlor, testator, or another party is still required to give the trust its full legal effect. The trust exists, but its terms are not yet fully perfected. Until that completing act occurs, a court of equity will supply what is missing and carry the trust into execution according to the evident intent of the creator.
This stands in contrast to an executed trust, in which the limitations and provisions are fully and finally set out at the moment of creation, leaving nothing further to be done.
The distinction carries real consequences: in an executory trust, equity looks past the literal words and inquires into the general intent of the creator, exercising more liberal construction to supply the deficiency. In an executed trust, the court takes the instrument as it finds it and gives effect to the precise words used.
Common Confusion
EXECUTORY TRUSTS vs. EXECUTORY INTERESTS: These terms sound alike and both appear in property and equity practice, but they operate in entirely different doctrinal registers. An executory interest is a future interest in property held by a third party (neither the grantor nor the natural heir), classified as either springing or shifting, and governed by the Rule Against Perpetuities. An executory trust is a trust that is incomplete in its own terms and requires further formalization. A researcher encountering "executory" in an equity or trust context must determine which concept is at issue before proceeding. Conflation of the two is a persistent error in secondary literature.
EXECUTORY TRUSTS vs. INCOMPLETELY CONSTITUTED TRUSTS: An executory trust should not be confused with a trust that fails because the trust property has not been fully transferred to the trustee (an incompletely constituted trust). An executory trust has a valid declaration and a discernible intent — it is the perfecting instrument, not the transfer of the res, that remains outstanding.
Core Elements
The traditional test for identifying an executory trust asks whether the creator of the trust has done everything necessary, or whether the instrument itself contemplates a further deed or settlement to carry out the trust's purposes. Courts look to:
1. Whether a further act was expressly contemplated — such as a direction to "settle" property or to execute a formal marriage settlement — signaling the creator understood the instrument to be preparatory only.
2. Whether the existing instrument is sufficient to constitute the trust standing alone — if it is, the trust is executed regardless of looseness or generality in its terms.
3. The general intent of the creator — in an executory trust, equity reads the instrument liberally and will reform or supply terms to match that intent, particularly in the context of marriage settlements and wills directing future settlements.
Why It Matters in Research
The executed/executory trust distinction was most consequential in the context of marriage settlements and entailed estates, and much of the historical case law arises in that setting. Researchers working in nineteenth-century American and English equity materials will encounter the distinction frequently in cases involving wills directing trustees to "settle" property on future children, where the question was whether a court could construe a fee simple direction as importing an entail or life estate to match the testator's evident dynastic intent.
In modern American practice, the distinction has largely receded. Trusts are now typically constituted in comprehensive written instruments, and the drafting practices that gave rise to incomplete trust declarations — particularly the reliance on subsequent formal settlements common in English conveyancing — are no longer standard. Researchers should be cautious about applying modern trust law concepts retroactively when reading equity materials from before the mid-twentieth century.
A navigational trap: Bouvier and other historical dictionaries define the term in the context of a truncated test — "Has the testator been what is called, and very properly, his own conveyancer?" — meaning, did the creator act as a finished draftsman, or did the instrument contemplate further professional formalization? This question-form framing does not always survive into modern treatises, which tend to describe the distinction more abstractly. When the historical sources cut off mid-test (as the Bouvier entry does here), researchers should consult Lewin on Trusts and Bispham's Principles of Equity for the complete formulation.
The distinction also surfaces in the construction of class gifts and limitations to "heirs of the body" — an executory trust framing allowed equity courts to treat such language as importing a strict settlement (with life estate and remainder), while the same words in an executed trust would be read literally according to the rule in Shelley's Case or its equivalent.
Historical Dictionary Support
Bouvier's Law Dictionary defines an executory trust as one in which "some further act is requisite to be done by the author of the trust to give it its full effect," citing Bispham's Principles of Equity and Lewin on Trusts as the core treatise authorities. Bouvier also notes that the distinction between executed and executory trusts was well settled in American jurisdictions, pointing to Pennsylvania and South Carolina authority, though it acknowledges the distinction was "once doubted in England," citing early Vesey reports. This acknowledgment of transatlantic doctrinal friction is useful: the distinction stabilized in English equity before it was uniformly received in American states, and state-by-state reception varied.
What Bouvier does not capture fully is the mechanism by which equity supplies the missing act — specifically, the court's power to reform the trust instrument in light of the general intent, and the resulting consequences for the construction of limitations on future children and class gifts. Researchers needing that analytical depth should work forward from Lewin and Bispham to later American equity treatises, particularly Pomeroy's Equity Jurisprudence.
Jurisdictional Note
The practical significance of the executed/executory distinction has been most pronounced in jurisdictions that inherited English common law conveyancing traditions, and it appears most frequently in older American equity decisions from states with active chancery court systems. In modern statutory trust regimes, the distinction rarely drives outcomes, and some Uniform Trust Code jurisdictions do not address it expressly. Researchers working in civil law or mixed-law jurisdictions should note the concept has no direct equivalent outside the common law tradition.
Encyclopedia Cross-Reference
The Law Mind Trusts, Estates & Probate Encyclopedia — Resulting Trusts: Purchase-Money and Failure-of-Express-Trust Resulting Trusts (estates_67) — for the doctrinal context of trust constitution and failure.
The Law Mind Property Law Encyclopedia — Future Interests: Executory Interests, Springing and Shifting (property_7) — essential for distinguishing executory trusts from executory interests.