What is a Trust

Outlines the basic terms in trust law.

Trust

An arrangement where a trustee is given property to look after for the benefit of one or more beneficiaries for a period of time.

Settlor

The person who creates a trust and transfers the property to the trustee.

Trustee

The person who is responsible for managing the trust property and carrying out the terms of the trust.

Beneficiary

The person or persons who are intended to benefit from the trust arrangement.

Declaration of trust

The first step in creating a trust, where the settlor/testator makes a clear statement of their intention to create a trust.

Trust property

The property that is placed under the control of the trustee to be managed for the benefit of the beneficiaries.

Fixed interest trust

A type of express trust where the beneficiaries have a fixed or predetermined share or interest in the trust property.

Discretionary trust

A type of express trust where the trustees have discretion in deciding how to distribute the trust property among the beneficiaries.

Vested interest

When a beneficiary's right to the trust property is certain and not dependent on any future event.

Contingent interest

When a beneficiary's right to the trust property is dependent on the occurrence of a future event.

Bare trust

A type of trust where the beneficiary is absolutely entitled to the trust property and can demand its transfer at any time.