Beneficiary Of Trust: Difference between revisions
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In the trust law, '''beneficiary of trust''' is an individual (e.g. a spous or minor), a group of individuals (e.g. relatives) or an [[organization]] (e.g. corporation, governmental institution, charity) profiting from a trust. A trust may concern more than one beneficiary<ref> Goldstone H., Hughes J., Whitaker K. (2015)., pp. 30 </ref>. | In the trust law, '''beneficiary of trust''' is an individual (e.g. a spous or minor), a group of individuals (e.g. relatives) or an [[organization]] (e.g. corporation, governmental institution, charity) profiting from a trust. A trust may concern more than one beneficiary<ref> Goldstone H., Hughes J., Whitaker K. (2015)., pp. 30 </ref>. | ||
The creation and operation of a trust involves the following three parties<ref> Goldstone H., Hughes J., Whitaker K. (2015)., pp. 30 </ref>: | The creation and operation of a trust involves the following three parties<ref> Goldstone H., Hughes J., Whitaker K. (2015)., pp. 30 </ref>: | ||
* '''grantor''' (creator/ settlor), an individual transferring a property which is concerned the body or corpus of a trust. Grantor names the beneficiaries of the trust. | * '''grantor''' (creator/ settlor), an individual transferring a property which is concerned the body or corpus of a trust. Grantor names the beneficiaries of the trust. | ||
* '''trustee''', a person | * '''trustee''', a person who administers a trust in accordance with pertinent local regulations and the terms and conditions of the trust. A trustee coordinates distribution of benefits to the beneficiary of the trust.. | ||
* '''beneficiary''', a receiver of the income or property from the trust. | * '''beneficiary''', a receiver of the income or property from the trust. | ||
==Basic Rights of Beneficiaries== | ==Basic Rights of Beneficiaries== | ||
A beneficiary is entitled to<ref> Webb Ch., Akkouh T. (2007)., pp. 20 - 27 </ref><ref> Goldstone H., Hughes J., Whitaker K. (2015)., pp. 218 - 220 </ref>: | A beneficiary is entitled to<ref> Webb Ch., Akkouh T. (2007)., pp. 20-27 </ref><ref> Goldstone H., Hughes J., Whitaker K. (2015)., pp. 218-220 </ref>: | ||
* a copy of a trust | * a copy of a trust | ||
* challenge the terms of a trust within 120 days from when one received a notice about the trust | * challenge the terms of a trust within 120 days from when one received a notice about the trust | ||
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* sue the trustee for breach of trust or malpractice | * sue the trustee for breach of trust or malpractice | ||
* obtain the sufficient [[information]] about the trust and its [[management]] | * obtain the sufficient [[information]] about the trust and its [[management]] | ||
* use profits from the trust to fulfil purposes named in the trust (e.g. education, funeral expenses), if any. Otherwise, the beneficiary is free to utilize profits to their liking. Once a particular purpose is achieved, the trust | * use profits from the trust to fulfil purposes named in the trust (e.g. education, funeral expenses), if any. Otherwise, the beneficiary is free to utilize profits to their liking. Once a particular purpose is achieved, the trust terminates. Sometimes, lifelong trusts are established as well. | ||
==Legal Title vs. Beneficial Title== | ==Legal Title vs. Beneficial Title== | ||
Trusts are a special type of property [[holding]]. A holder of '''the legal title''' to a property under trust, '''a trustee''' does not hold the absolute ownership. The trustee is obliged to govern the property for the benefit of a beneficiary. Thus, it is '''the beneficiary''' that holds '''the equitable (beneficial) title''' to trust property<ref> Webb Ch., Akkouh T. (2007)., pp. 16 & 17 </ref><ref> Brown G., Myers S. (2008)., pp. 215 </ref>. | Trusts are a special type of property [[holding]]. A holder of '''the legal title''' to a property under trust, '''a trustee''' does not hold the absolute ownership. The trustee is obliged to govern the property for the benefit of a beneficiary. Thus, it is '''the beneficiary''' that holds '''the equitable (beneficial) title''' to trust property<ref> Webb Ch., Akkouh T. (2007)., pp. 16 & 17 </ref><ref> Brown G., Myers S. (2008)., pp. 215 </ref>. | ||
Sometimes, a sole beneficiary may become a co-trustee. However, when a sole beneficiary turns out to be a sole trustee and therefore holds both the legal and equitable title, the trust fails. This is due to the fact that these two titles give the absolute ownership<ref> Webb Ch., Akkouh T. (2007)., pp. 2 - 4 </ref>. | Sometimes, a sole beneficiary may become a co-trustee. However, when a sole beneficiary turns out to be a sole trustee and therefore holds both the legal and equitable title, the trust fails. This is due to the fact that these two titles give the absolute ownership<ref> Webb Ch., Akkouh T. (2007)., pp. 2-4 </ref>. | ||
==Footnotes== | ==Footnotes== | ||
<references/> | <references/> | ||
{{infobox5|list1={{i5link|a=[[Mandatory disclosure]]}} — {{i5link|a=[[Vesting order]]}} — {{i5link|a=[[Confession Of Judgment]]}} — {{i5link|a=[[Fiduciary bond]]}} — {{i5link|a=[[Absolute assignment]]}} — {{i5link|a=[[Adverse Action]]}} — {{i5link|a=[[Nominee shareholder]]}} — {{i5link|a=[[Good faith bargaining]]}} — {{i5link|a=[[Liabilities of directors]]}} }} | |||
==References== | ==References== | ||
Latest revision as of 17:15, 17 November 2023
In the trust law, beneficiary of trust is an individual (e.g. a spous or minor), a group of individuals (e.g. relatives) or an organization (e.g. corporation, governmental institution, charity) profiting from a trust. A trust may concern more than one beneficiary[1].
The creation and operation of a trust involves the following three parties[2]:
- grantor (creator/ settlor), an individual transferring a property which is concerned the body or corpus of a trust. Grantor names the beneficiaries of the trust.
- trustee, a person who administers a trust in accordance with pertinent local regulations and the terms and conditions of the trust. A trustee coordinates distribution of benefits to the beneficiary of the trust..
- beneficiary, a receiver of the income or property from the trust.
Basic Rights of Beneficiaries
A beneficiary is entitled to[3][4]:
- a copy of a trust
- challenge the terms of a trust within 120 days from when one received a notice about the trust
- receive a fiduciary accounting every year or upon a request
- sue the trustee for breach of trust or malpractice
- obtain the sufficient information about the trust and its management
- use profits from the trust to fulfil purposes named in the trust (e.g. education, funeral expenses), if any. Otherwise, the beneficiary is free to utilize profits to their liking. Once a particular purpose is achieved, the trust terminates. Sometimes, lifelong trusts are established as well.
Legal Title vs. Beneficial Title
Trusts are a special type of property holding. A holder of the legal title to a property under trust, a trustee does not hold the absolute ownership. The trustee is obliged to govern the property for the benefit of a beneficiary. Thus, it is the beneficiary that holds the equitable (beneficial) title to trust property[5][6].
Sometimes, a sole beneficiary may become a co-trustee. However, when a sole beneficiary turns out to be a sole trustee and therefore holds both the legal and equitable title, the trust fails. This is due to the fact that these two titles give the absolute ownership[7].
Footnotes
- ↑ Goldstone H., Hughes J., Whitaker K. (2015)., pp. 30
- ↑ Goldstone H., Hughes J., Whitaker K. (2015)., pp. 30
- ↑ Webb Ch., Akkouh T. (2007)., pp. 20-27
- ↑ Goldstone H., Hughes J., Whitaker K. (2015)., pp. 218-220
- ↑ Webb Ch., Akkouh T. (2007)., pp. 16 & 17
- ↑ Brown G., Myers S. (2008)., pp. 215
- ↑ Webb Ch., Akkouh T. (2007)., pp. 2-4
| Beneficiary Of Trust — recommended articles |
| Mandatory disclosure — Vesting order — Confession Of Judgment — Fiduciary bond — Absolute assignment — Adverse Action — Nominee shareholder — Good faith bargaining — Liabilities of directors |
References
- Brown G., Myers S. (2008)., Administration of Wills, Trusts, and Estate Cengage Learning
- Goldstone H., Hughes J., Whitaker K. (2015)., Family Trusts: A Guide for Beneficiaries, Trustees, Trust Protectors, and Trust Creators John Wiley & Sons. Suffolk
- Hoffman W., Raabe W., Smith J., Maloney D. (2012)., Study Guide Cengage Learning
- Van der Merwe C., Du Plessis J. (2004)., Introduction to the Law of South Africa Kluwer Law International
- Webb Ch., Akkouh T. (2007)., Trusts Law Macmillan International Higher Education
Author: Piotr Łabuz
