Trust Defined

Question 1

What is a Trust?

Answer 1

A trust is a fiduciary relationship in which a trustee holds legal title to specific property under a fiduciary duty to manage, administer, and safeguard trust assets and income for the benefit of the beneficiary.

Question 2

Who holds Legal interest in a trust property

Answer 2

A trustee holds the legal title of property, but receives no benefit from the legal title

Question 3

Who holds Equitable Title?

Answer 3

A beneficiary holds equitable or beneficial interest in trust property and is the one that receives the benefits of ownership

Question 4

Trustees Duties

Answer 4

A trustee is a fiduciary and thus must (1) deal with the property with reasonable care (2) must maintain the utmost degree of loyalty and (3) is personally liable if their conduct falls beneath the required standard

Question 5

What are the two types of Express Trusts?

Answer 5

Private - private beneficiaries (certain ascertainable persons)

Charitable - charitable beneficiaries (indefinite class of persons or the public in general)

Question 6

Trusts Created by Operation of Law

Answer 6

Resulting Trusts - generally arise from the presumed intention of the owner of the property

Constructive Trusts - Are an equitable remedy used to prevent unjust enrichment