What Is A Trust?

Definitions

The "Settlor" is the person who makes a gift of assets of whatever kind to the trustee. There may be joint settlors.

The "Beneficiaries" are the persons who may benefit from the assets held within the trust. The settlor may be one of the beneficiaries.

The "Trustee" is the person or company that is the legal owner of the assets of the trust and is responsible for the administration of the trust in accordance with the terms laid down by the trust deed and the applicable law.

A "Trust" is an equitable obligation normally constituted by a written document called the "Trust Deed" (or Deed of Settlement or Declaration of Trust. In this article the term "Trust Deed" is used for all three) which binds the trustee to deal with the assets over which he has control for the benefit of the beneficiaries. The beneficiaries (or any one of them) have the legal right to compel the trustee to act in accordance with the terms of the trust deed and the applicable law.