Trust Basics

Understanding the simplicity of a trust will serve the mastery of the trust entity.

A trust is a contract where someone holds and manages property for the benefit and use of another.

This arrangement requires an individual to grant (give away) property into the trust where the trustee controls and administers not only the property in trust, but how and when the beneficiary gets to use it.

The arrangement creates two different ownerships, legal ownership and equitable ownership. When ownership is split, there is no responsible party. The trustee does not own the thing in equity and thus is not responsible for it. The beneficiary is the equitable owner, but does not control it and thus is not responsible either. This can be altered if the trustee or beneficiary break certain rules and comingle resources, but a properly created and administered trust provide a very unique and robust defense against asset seizure or forced liquidation because there is no responsible party, only a contract.

Trust Basics Video (17 min)