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A trust is a legal relationship in which you give another party - called a trustee - authority over certain assets for the benefit of a third party, known as a beneficiary. A trustee has a fiduciary duty to a beneficiary, and must administer the assets for the benefit of the beneficiary, rather than themselves.
There are some basic rules that govern the forming and administration of a trust.
Trustees have certain legal limitations that apply to the techniques they use to execute their duties. They are required to be responsible, to take care, and to complete their work in good faith. They should be meticulous in their management of the trust for its beneficiaries. Any cash or investments held in trust must be looked after by the trustees, who are responsible for any fraud that occurs.
Trustees can appoint people to help them, such as an investment manager. If the trustees take a salary, it is provided by the property held in trust, and must meet certain requirements based on the amount of the assets held in trust. The trust’s deed should lay out this information.
Last Updated on: Wed, 16 Jun 2021