Hi and welcome to TransLegal's lesson of the week.
Today we're going to be talking about the term "trust", which if you look it up in any legal dictionary like Blacks you will see page after page of trusts - different kinds of trust, but the basics are this:
A trust is a legal device used to set aside the money or property of one person, called the settlor, for the benefit of another person – the beneficiary. For example, a trust may arise where assets are left in a will to children who are too young to legally own the assets.
Now it's important to note that a trust is not a legal person. The settlor transfers the property like shares or real estate to trustees who own the trust property with respect to third parties.
The trustees have what are called fiduciary duties vis-à-vis the beneficiaries of the trust. Fiduciary duties are the legal duty of a professional in a position of trust to act in the best interest of a client or beneficiary. What this means is, the trustees have a duty to manage the trust property, what's called the corpus of the trust, for the benefit of the beneficiaries. In this way, a trust permits the separation of legal ownership and beneficial interest.
So that's it for today. If you have any questions about the term trust please leave them in the comments section below and myself or one of my colleagues will get back to you as soon as we can. Thank you.