The Establishment of a Trust

A trust is a legal arrangement where the trustor (referred to as Party “A”) transfers the ownership or title of an asset to a trustee (referred to as Part “B”), who then holds and manages the asset for the benefit of a beneficiary (referred to as Party “C”). In many cases, the asset transferred to the trustee eventually becomes their own personal possession, with full ownership rights, although sometimes the trustee simply holds the asset on behalf of the beneficiary.

The primary role of the trustee is to manage the asset, distribute its profits, or transfer them to the beneficiary according to the terms established in the trust agreement. The specific duties and powers of the trustee are outlined in the trust contract, which may take the form of a deed of trust, a declaration of trust, or an agreement of trust. The trustee is legally bound to act in accordance with the terms and conditions outlined in the trust agreement.

Trusts can be created through formal contracts or established by the conduct of the parties involved. While the concept of trusts is often associated with English common law and equity principles, some argue that its origins can be traced back even further, possibly to references in ancient texts such as the Talmud.

Assets entrusted to a trustee can be tangible or intangible, including intellectual property. Trusts may be established for either public or private purposes, grant the trustee varying degrees of discretion, and may benefit a single beneficiary or multiple beneficiaries.