THE TRUST RELATIONSHIP Flashcards
what is a trust
a legal mechanism whereby trust property is held by one party for the benefit of another
what does a trust involve the division of
the division of the legal and equitable title to the trust property
trusts grant proprietary rights to beneficiaries and impose mandatory equitable obligations on trustees - true or false
true
for there to be a trust, what must there be to enforce the obligations of the trustess
beneficiaries
a trustee is the legal owner and manager of trust property, which they hold on trust for the beneficiaries as beneficial owners of the trust property in equity - who is the absolute owner of the trust property
neither the trustee nor the beneficiary - they are both limited owners
what are the four key components to a trust
- settlor
- trustee
- beneficiary
- trust property
what is the settlor
the person who creates the trust
the settlor generally begin by holding absolute title to the trust property - in order to create the trust what must they do
they must either transfer the property to the trustees to hold the property on trust fir specified beneficiaries or they could declare themselves a trustee of the property
which title does the trustee hold
the trustee holds the legal title of the trust property on trust for the benefit of the beneficiaries
is it possible for the trustee to also be a beneficiary under the trust
yes in some circumstances
which title does the beneficiary own
the equitable title to the trust property
(aka beneficial title)
what is the trust property - are there any requirements for what can or can’t be trust property
the trust property, or subject matter of the trust, can be any kind of property
personalty (personal property)
or real property
may be land, money, shares etc or a combo of different types of property
structure of simple trust
settlor
trustee (legal title)
beneficiary (equitable title)
what are the four categories that trusts can be categorised into
express
implied
inter vivos
testamentary
what is an express trust and who creates them
theyre expressly created by the settlor
they are created intentionally rather than being implied by the courts or the conduct of the parties
what are implied trusts and how do they arise
trusts that arise by operation of the law
what are the main types of implied trust
resulting and constructive trusts
inter vivos trust (lifetime trust)
a trust established during a persons lifetime