TSEM6233 | Legal background to trusts & estates: setting up a trust

When a trust is set up, the legal interest (TSEM6018) of assets passes to the trustees. The equitable interest (TSEM6018) passes to the beneficiary.

The property that a settlor puts into trust is called

• the trust fund, or

• the corpus of the trust, or

• settled property.

The trust property does not pass to the settlor’s personal representatives when he dies.

Trustees hold the assets in a fiduciary capacity in accordance with

• the terms of the trust

• the relevant statutory provisions.

This means they must exercise rights and powers in good faith for the benefit of beneficiaries.

A testator can set up more than one trust in a will. These trusts can be for the benefit of various people, not necessarily the testator’s family.