the distinction between legal and beneficial or equitable ownership is crucial to trusts
A trust in its simplest terms is a means of deferring a gift (an inter-vivos trust) or a legacy (a will trust). A trust works because of the distinction found in common law (as opposed to civil law systems) between legal and beneficial or equitable ownership (the question of trusts in relation to civil law legal systems will be covered in a future article). The settlor is initially the legal and beneficial owner of the asset, that is, they are fully connected to the asset. They transfer legal ownership or title to trustees and defines how the trustees are to benefit the beneficiaries. The...
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