A trust is an arrangement whereby property or assets are transferred from one person (the ‘settlor’) to another person (the ‘trustee’) to hold the property for the benefit of a specified list or class of persons (the ‘beneficiaries’ or to achieve a particular purpose). A part of setting up a trust a written document (the ‘trust deed’) will be prepared. This evidence of the creation of the trust sets out the terms and conditions upon which the trustees hold the trust assets and outlines the rights of the beneficiaries.
The practical advantages of a trust are gained from the distinction that is drawn between the formal or legal owner of the property, the trustee, and those people that have the use or benefit of the property, the beneficiaries.