What is the legal framework for the administration of trust?
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A trust is a legal device that enables a person or entity to maintain a unique form of ownership of property. Typically, a trust is created by one person for the benefit of another. But rather than giving the property to the "beneficiary" directly, the "grantor" of the property often wants to delay the conveyance of the property for any number of possible reasons.
A trust is typically comprised of three main parties: the trustor (aka the grantor), the trustee, and the beneficiary. The "grantor" of a trust is the person or entity who creates the trust for the purposes of divesting himself or herself of ownership, and for creating a right of the beneficiary to at some point obtain ownership. The "trustee" is a fiduciary (having obligations to exercise care, loyalty, and honesty) typically for both the grantor as well as the beneficiary.
The trustee will hold title to the property as trustee, and not in an independent capacity. The trustee is typically responsible for maintaining and administrating the trust. As trusts are legal devices (documents) which require legal interpretations, lawyers are often appointed as trustees, and often will charge a fee.
There are many kinds of trusts which have different rules and terms of operation. The administration and operation of any trust depends on the terms of the trust itself, as well as the applicable law. See the eNotes link below for more information!
Trusts are not easy to understand. You find a good chart of a trust on: http://www.switzerland-family-office.com/trusts.html. This makes it a bit easier to understand. Trusts are often used by ultra high net worth families.
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