Trusts FAQ - What makes up a trust?
Date: March 04, 2011
Q. What makes up a trust?
A. A trust is made up of the following elements: -
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the settlor - the person who provides the trust property (which could be any asset) and creates the trust, they are specifically forbidden from benefiting from the trust;
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the trustee - the person (often a company) who becomes the legal owner of the trust property and who manages it in accordance with the settlor's intentions for the exclusive benefit of the beneficiaries;
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the trust deed - a document drawn up to show the way in which the trust is to be managed and the manner in which income is distributed;
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the appointor - This is the most powerful person in the trust structure as this is the person(s) who, under the trust deed, can replace the trustee; and
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the beneficiaries - the person(s) for whom the trust was created and to whom the trustee distributes the income and eventually the assets.
