The following Private Client guidance note provides comprehensive and up to date legal information covering:
This Practice Note was originally drafted by Christopher Kerr-Smiley, Legal Director at Womble Bond Dickinson, but is now maintained by Lexis®PSL Private Client.
Trusts are commonly used by private individuals as a way to hold assets, generally in order to preserve and protect those assets for the benefit of others, usually family members, but sometimes for their own benefit as well. Commercial lawyers will often come across trusts in this context, where one or more parties to a transaction on which they are advising are holding assets in a trustee capacity.
However the use of the legal relationship which is created by a trust extends far beyond the family situation. Trusts are found in many different commercial contexts, such as pension trusts, employee benefit trusts and unit trusts. They are also used in lending transactions, eg syndicated loans, and many smaller charities operate through a trust structure. See Practice Note: Commercial uses of trusts.
Specific statutory provisions govern some aspects of pension trusts and charity trusts. This Practice Note does not cover those provisions.
A trust will exist where there is a separation of the legal ownership of an asset from the underlying beneficial interest. The 'beneficial interest' is, broadly speaking, the economic benefit of the asset.
The beneficial interest will either:
belong to one or more
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