The Trust Concept
A trust is an arrangement whereby property is transferred from one person (the original owner, also known as the Settlor) to another person or corporate body (the Trustee) to hold the property for the benefit of a specified list or class of persons (the Beneficiaries).
A trust can be created solely by verbal agreement but it is normal for a written document (a Trust Deed) to be prepared. This Deed evidences the creation of the trust, sets out the terms and conditions upon which the Trustees hold the assets, and outlines the rights of the Beneficiaries. A trust is not therefore dissimilar to a will except that assets are transferred to the Trustees during the Settlor's lifetime rather than to executors upon the death of the owner.
Those unfamiliar with the trust concept often express concern at the idea of transferring ownership of their property to a Trustee. This anxiety can be allayed provided that the distinction between legal
and beneficial ownership is properly understood and provided that a trust is governed by a reliable trust law that can be enforced in a reputable jurisdiction.