BLAW211: Trusts
What is a Trust?
- A trust is a legal relationship in which the holder of a right gives it to another person or entity who must keep and use it solely for another's benefit.
Settlor
- person who creates a trust and give property to the trustee to be held on trust for the benefit of specified persons
- Have to have the ability to give the property to be a settlor
- They may be a beneficiary themselves
- Can also be a trustee, but cannot be a trustee and a sole beneficiary
- Person of unsound mind cannot create a trust (can’t be mentally ill, alcoholics or bankrupt)
Trustee
- a person to whom legal ownership of trust property is given who holds and deals with the property in accordance with the terms of the trust
-who the settlor transfers title to
- one property can have multiple
- bound by terms of trust deed
- remain impartial to benficiaries
- equitable obligation to not harm beneficiaries
Beneficiary
- a person who has an equitable entitlement to recieve a benefit from the trust assets
- does not have legal title (equitable interest only)
- not tangible to property until that thing occurs (e.g minors when they turn 18)
- expectation to receive
Contingent Beneficiary
- a beneficiary who's interest is contingent on some event occurring (e.g being born)
Discretionary Beneficiary
- a beneficiary who is only entitled to an interest at the discretion of a specified person