Characteristics of Trusts: Equity and Trusts - Assignment Solution

This assignment solution delves into the characteristics of trusts, examining key aspects such as the separation of legal and beneficial interests, the distinct nature of trust assets, and the roles and responsibilities of trustees. It highlights how the trustee manages assets for the benefit of beneficiaries, emphasizing the importance of protecting beneficiary interests. The solution also touches upon the legal title of the trust, the powers and duties of the trustee, and the settlor's ability to retain certain rights. The assignment references UK and EU laws, UK Case Laws, and Law Journals, providing a comprehensive understanding of the subject matter.

Running head: EQUITY AND TRUST
EQUITY AND TRUST
Name of the Student:
Name of the University:
Author Note:

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EQUITY AND TRUST
Characteristics of trusts:
A trust can be regarded as a legal relation formed either in lifetime or after death by a
settlor when the assets are kept in the control of a trustee for the beneficiary’ benefit or can be
for some other specified purpose1. The characteristics of a trust are discussed in the following pat
of the answer.
A trust must possess the following characteristics:
 The trust allows the separate legal ownership with the beneficial interest such that the
trustees assume the power of the owners of the trust property in cases where the third
parties are considered2. Further the beneficiaries can expect that the trust property will be
managed by the trustees for their advantage and benefit.
 The assets of a trust form a separate fund and it does not form part of the personal estate
belonging to the trustee3.
 Legal title of the trust is either in the trustee’s name or in another person’s name acting
on behalf of the trustee.
 The trustee possesses the power as well as duty for which he can be made accountable to
cause the managing, employing or disposing the assets of the trusts according to the
terms of the trust and as per the duties imposed by law on him4.
 The principal duty of the trustee is to protect the interest of the beneficiaries.
 The settlor of a trust can reserve certain rights and powers with him and the fact that the
trustee acts as a beneficiary cannot be said to be inconsistent with the trust’s existence.
1 Penner, James. The law of trusts. Oxford University Press, 2016.
2 Sitkoff, Robert H. "Fiduciary Principles in Trust Law." (2018): 18-19.
3 Campbell, Sam. "Personal liability of a trustee to tax on trust income: Part 1." Taxation in Australia 53.5 (2018):
263.
4 Hudson, Alastair. Understanding equity & trusts. Routledge, 2016.

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EQUITY AND TRUST

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EQUITY AND TRUST
References:
Campbell, Sam. "Personal liability of a trustee to tax on trust income: Part 1." Taxation in
Australia 53.5 (2018): 263.
Hudson, Alastair. Understanding equity & trusts. Routledge, 2016.
Penner, James. The law of trusts. Oxford University Press, 2016.
Sitkoff, Robert H. "Fiduciary Principles in Trust Law." (2018): 18-19.