Trusts and pension schemes: what is a trust?
There is no legal definition of ‘trust’. The following three definitions approach the subject from different viewpoints.
A working definition
‘A trust is an obligation binding a person (a ‘trustee’) to deal with property in a particular way for the benefit of another person or class of persons (of which he himself may be a member) whose interests (except in Scotland) are protected by the equitable jurisdiction of the courts’.
A simple definition from a legal viewpoint
A trust is a disposition of property to a person (trustee) or persons jointly (trustees) in whom the legal title then vests in the confidence that the benefits will be applied to the advantage of one or more other persons (beneficiaries) or some other object permitted by law.
A more complex definition
‘A trust… is the relationship which arises wherever a person called the trustee is compelled in equity to hold property, whether real or personal and whether by legal or equitable title, for the benefit of some persons (of whom he may be one) or for some object permitted by law in such a way that the real benefit of the property accrues, not to the trustee, but to the beneficiaries or other objects of the trust’ (Law of Trusts, 9th edition - Professor Keeton).
Please refer to the Trusts, Settlements and Estates Manual (TSEM) for further information.