Course: Estate Planning
Lesson 3: Understanding Trusts and Trust Documents
Perhaps a slightly mundane question, but here we go:
It had been my understanding that property in a trust was held and owned by the trust itself, as a separate legal entity. However, several times in this course there has been reference to the trustee having ownership of the property. Is there a way to reconcile these two ideas?
Or, is it a question of “it depends on what state you are in”?
The Trustee has LEGAL ownership of the trust assets.
- Trustees are responsible for administering the trust according to its terms, preserving trust assets, making investment decisions, minimizing income taxes, and interpreting the terms of the trust (just to name a few of their responsibilities).
- Trustees cannot use the assets for their own benefit.
The beneficiaries have BENEFICIAL ownership of the assets.
- Beneficiaries have the specific right to use trust assets, under the terms of the trust, for their own benefit.
- Beneficiaries have NO legal ownership rights or responsibilities over trust assets.
How completely does this address your question?
Onward and Upward,