Legal background to trusts & estates: splitting interests to create a trust
An absolute interest has two elements
- the legal interest, and
- the beneficial interest.
The owner of an absolute interest can split the two elements.
- retain the legal interest and create beneficial interests in the asset
- retain the beneficial interest in the asset and transfer the legal interest to a nominee
- transfer the legal interest to trustees and create a beneficial interest in the asset.
Any of these can create a trust. It might be a bare trust.
He can effect this in his lifetime and create a settlement inter-vivos (between theliving). Or he can effect it after his death by including suitable provisions in his will.