At what point is the contents of a trust considered to be the property of the beneficiary?
Who owns the property in a trust UK?
The trustees
The trustees are the legal owners of the assets held in a trust. Their role is to: deal with the assets according to the settlor’s wishes, as set out in the trust deed or their will. manage the trust on a day-to-day basis and pay any tax due.
Which property can be the subject matter of a trust?
What is certainty of subject matter? The certainty of subject matter is the requirement that the trust property left to the beneficiary must be easily identifiable, along with the interests gained by the beneficiary. The trust is likely to fail if the property left on trust is unidentifiable or uncertain.
Who owns the property in a trust?
One common misconception is that the assets in the trust fund are legally owned by the trust. In fact, a trust, unlike a company, cannot own assets and instead the trustees are the legal owners of the assets.
Can a beneficiary live in a trust property?
If the Trust property is something more tangible then the Beneficiary is entitled to use it (eg if the Trust property was a house, the Beneficiary could live there rent free). Often the benefit of the Trust property will pass to different Beneficiaries when the first Beneficiary dies.
What are the three certainties that must be present to create a valid trust?
For an express trust to be valid there has to be three certainties. These are certainty of intention, certainty of subject matter, and certainty of objects. Without these certainties, an express trust will not be valid. The purpose of these certainties is to ensure the trust is properly controlled and enforced.
What makes a trust void?
In most cases, what makes a trust invalid is a problem with its creation. For instance, a trust might be legally considered invalid if it: Was created through intimidation or force. Was created by a person of unsound mind.
What are the three certainties required to set up a trust?
There are three certainties which must exist for trust to be recognized: certainty of intention, certainty of subject-matter, and certainty of objects.
What happens if there is no certainty of subject matter?
Certainty of subject matter
It is a requirement that the subject matter be certain — that the property intended to be in the trust be separated from other property, showing clarity in what is intended to be trust property. If there is no clear separation, the trust will fail, as in Re Goldcorp Exchange Ltd.
What are the essential elements of a trust?
Every private trust consists of four distinct elements: an intention of the settlor to create the trust, a res or subject matter, a trustee, and a beneficiary. Unless these elements are present, a court cannot enforce an arrangement as a trust.
What happens when there is no certainty of subject matter?
If there is uncertainty as to the property held on trust, then a court cannot enforce the settlor’s wishes or the trustees’ obligations. ⇒ Where the property is expressed in vague or uncertain terms, the trust will generally be held to be invalid.
What can cause a trust to fail?
Based on our experience of more than thirty years in practicing Trust law, the most common reason Trusts fail is that they are not funded. The purpose of a Trust is to manage the assets held in it. In order for the Trust to do it’s job, the assets need to be in the Trust.
Why must a trust have certainty of objects?
Outcome if objects are uncertain
If no certainty of objects can be established, the trustee will hold the property for the settlor on a resulting trust. The settlor can reclaim the legal title back from the trustee and make a new valid, trust.