Details of a trust

You (The Settlor)

You are the most significant party involved in your trust. Also called the settlor, you own the trust itself and the assets held within. It is up to you to appoint trustees who will look after the trust, and your beneficiaries who are to receive assets according to conditions you state in the trust.

The trustees play an important role in managing a trust. Legal ownership of the held assets is transferred to the trustees in order for them to manage the trust and carry out your instructions and wishes. You may choose to appoint yourself as trustee, or you can appoint one or more trustees.

Your Beneficiaries

The trust will release assets to your beneficiaries according to terms and conditions set by you. If your trust holds investment portfolios, dividend cheques may be given. For cash investments and bonds, interest cheques may be released. Depending on your wishes, the trustees may be given an amount of flexibility regarding when and how the beneficiaries receive assets from the trust.

Trust Company and Trustees

Trust companies provide the service of managing trusts for their clients. From setting it up, to looking after it throughout it’s duration, the trust company is responsible for the administrative aspects of your trust. If you appoint them as your trustees, they will handle the distribution of your assets to your beneficiaries, as well as manage the assets that are still held in the trust.

Although as settlor you are technically in control of the assets—they are your assets to begin with—the trust company assumes legal control of any assets placed in the trust. In reference to this arrangement, the trust company is known as the trustee. You may appoint any person as your trustee, including yourself or your spouse. In such a case, the trust contents will be held in an agency such as a bank and that agency need not be appointed as trustee.

Deed of Trust

A deed of trust is used in place of a mortgage, and the title of the property will be in the trustee’s name. However, the settlor will retain the right to live, sell or use the property as they see fit. Should circumstances necessitate it, the deed grants the trustee the right to foreclose without having to resort to a lawsuit.

Deeds of trust apply can apply to other assets such as vehicles and companies.

Trust Fund

A trust fund is comprised of assets that the settlor chooses to enter into a trust. Legally under the ownership of the trustee whose responsibility it is to ensure that assets are released to the beneficiaries as specified by guidelines in the trust.

The trust may either be revocable or not. The former allows the settlor to change or cancel the trust whenever they wish, while the latter may altered only upon consent from the beneficiaries.