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#2-A Trust Is A Fiduciary Relationship With A Specific Purpose, Or, "Trust Me Baby"!

Updated: Mar 30, 2023

Ownership consists of a set of rights regarding assets that are often bundled and held by one person. The bundle can be separated into strands of legal title and of equitable title to accomplish certain goals. Generally, the goals relate to asset protection, controlling access to assets, or avoiding the probate process for estate administration. The separation of the strands of ownership occurs when the owner of assets sets up a Trust.


“A Trust is a fiduciary relationship where a person, the Trustee, holds legal title to property for the beneficial use of another, the Beneficiary, at the request of a third person, the Grantor, who is the owner of the assets.” Black’s Law Dictionary, 9th Edition. 1990. It is useful to think of these as positions with specific roles to play in the Trust arrangement. Each position may be filled by the same person or different people depending on the goal of the Trust.[1] The details of this relationship and goals for the Trust are set out in the Trust document.


A Trustee holds bare legal title (responsibility and accountability) to the property as a fiduciary. As such, the Trustee owes the legal duties of loyalty, prudence, and impartiality to the Beneficiary. They are responsible for the assets and accountable to the Grantor. The Trustee has no right to the beneficial use of the property. Equitable title – the right to possess and use the property – is given to the named Beneficiary. The Beneficiary’s access to the property and the terms governing the use of the property are set out in the Trust document. The Trustee oversees the Beneficiary’s beneficial use of the property.


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[1] For example, if the goal is to protect assets from creditors or to qualify financially for government benefits, the grantor transfers legal title to a third party as trustee. The grantor can retain equitable title with restrictions on access and use, but often transfers it to a third party. The more separated the grantor is from ownership, the more protected is the asset.




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