Trust Definition
Trust, as defined by the common law legal systems pertains to a relationship in which a person or entity called the trustee possesses legal title to certain property or which we refer to as the trust property or trust corpus, but is obliged by a fiduciary duty to exercise that legal control for the benefit of one or more individuals or organizations which is the beneficiary, who hold “beneficial” or “equitable” title. The trust is governed by the terms stipulated in the written trust agreement and local law. The entity (individual, a partnership, or a corporation) that creates the trust is called as trustor, settlor, grantor, donor, or creator.
Trust is a dual title because of its legal and equitable characteristics. Due to this, trust is often referred to as a “split title”. The “title split” of trust law is due to its separate functions. Legal title is one aspect of the trust that pertains to the control, management, and possession characteristics, while equitable (beneficial) title is a feature of trust that involves “benefit,” “enjoyment,” and “use”.

Practitioners often come across such terms as inter vivos and testamentary trusts. Distinguishing the two is important to define the kind of trust required. When the person is living at the time the trust is established is called an inter vivos trust. A trust derived from an individual’s will is called a testamentary trust. Since the will takes effect only upon death, a testamentary trust is often created during or after the date of the trust creator’s death

Trustees

Trustees could either be (1) competent individuals or (2) state or federally chartered corporations with trust powers (most often banks). Usually, bank trustees will have incorporated their fiduciary organization into the investment management or private banking groups’ aspect of the institution.
In some cases there are two trustees, an individual will serve as trustee together with a bank trustee. They are referred to as “co-trustees.” Both individual and corporate trustees are allowed to charge fees for their services. But sometimes, the individual trustees serve as gratis in cases when the trustee is part of the settlor’s family or the settlor him/herself. Trust may define each trustee’s function. They may serve the same or different purpose, depending on what is outlined by the trust. If the trust is quite about it, it is safe to assume that both individual and bank trustees have similar responsibilities.

Trust Document

The following documents are found in the foregoing examples and are essential in creating trust :
1. Written instrument or the trust document which contains the signature of both the settler (who could be one or more beneficiaries) and the trustee
2. The last will and testament of the settler

In most situations, there are two important requirements to create a trust. These two must be present in order to make the document valid. These two requirements include: it needs to be
1. Signed
2. Money or something of value is turn over from the settler to the trustee.

Gwen Cuizon http://www.triond.com/users/Gwendolyn+Cuizon

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