Who Owns the Trust Property? Unlike a person or a company, a trust is not a legal entity that can own property. This is because a 'trust' is just a relationship between the legal owner (the trustee) and the beneficial owners (the beneficiaries).
Under normal circumstances, the rent and any capital gains belong to you, the owner. In a trust situation, they belong to the trust and the trust has to distribute them, or give them away. The trustee can choose who to give the income to based on the terms of the trust deed.
Once property has been transferred to a trust, the trust itself becomes the rightful owner of the assets. In an irrevocable trust, the assets can no longer be controlled or claimed by the previous owner.
Unit Trusts
A trust is not a legal entity in itself and cannot own property. Instead a trust describes a relationship between various parties whereby a trustee or trustees (the legal owner) hold trust property on behalf of beneficiaries (the beneficial owner(s)).
A relationship where a person or organisation (the trustee) is under an obligation to hold property (real estate and/or money) for the benefit of other persons (the beneficiaries).
A big advantage of buying property in a trust is that the structure provides flexibility in distributing both income and capital gains to a group of people at the discretion of the trustee. Under normal circumstances, the income and any capital gains belong to you, the owner.
A trust is not a legal entity in itself and cannot own property. Instead a trust describes a relationship between various parties whereby a trustee or trustees (the legal owner) hold trust property on behalf of beneficiaries (the beneficial owner(s)).
In a super fund, the board of trustees (or directors) is the trustee of the trust and holds legal title and ownership of the fund's assets on behalf of the members. At all times, however, the beneficial interests of the fund's assets – including the income and capital – belong to the fund's members.
The entity which holds the property is called a trustee, and is subject to specific duties as a result of that role. The entity which the trustee holds the property for is called a beneficiary. The entity which gave the property to the trustee to be held on trust for the beneficiary is called the settlor.
An Australian Unit Trust is a cross between a Family Discretionary Trust and a company. In a Family Discretionary Trust, the Trustee holds the assets for the Beneficiary. So too, the Unit Trusts' Trustee holds the assets for the benefit of the Unit Holders.
What Is a Beneficiary of Trust? A beneficiary of trust is the individual or group of individuals for whom a trust is created. The trust creator or grantor designates beneficiaries and a trustee, who has a fiduciary duty to manage trust assets in the best interests of beneficiaries as outlined in the trust agreement.
Any person with contractual capacity or capable of making a Will and who intends to dispose of his property in a specific manner within the framework of trusts may create a TRUST. This person is called the FOUNDER of the TRUST.
Again, this means you can't just withdraw from a trust fund. Instead, you receive that money or assets through one of the following distribution types that are pre-determined by the grantor: Outright distributions, in which the beneficiaries receive the assets outright, generally in a lump sum, and without restrictions.
The trust will usually continue to exist in accordance with the terms of the trust deed, even when the principal beneficiary dies. An exception to this is if a particular beneficiary has any unpaid present entitlements within the trust.
Who Owns the Trust Property? Unlike a person or a company, a trust is not a legal entity that can own property. This is because a 'trust' is just a relationship between the legal owner (the trustee) and the beneficial owners (the beneficiaries).
Secondly, a stranger to the trust can be liable for breach of trust by knowingly assisting in a fraudulent and dishonest design on the part of the trustees (“knowing assistance”).
A trustee is a person or company appointed to manage assets (known as a trust) on behalf of another party (known as the beneficiary). Trustees have legal duties to act in good faith, in the best interest of the trust, and in accordance with the terms of the trust documents.
Trust Assets
Existing trusts such as a family trust, will not form part of your estate. A trust is considered a separate legal entity and remains under the control of the trustee. If the deceased was a trustee, then the person known as the appointor will need to nominate a successor trustee.
A trustee is the legal owner of the trust property and is responsible for administering the trust's property and income for the benefit of the trust's beneficiaries.
A trust account is a legal arrangement through which funds or assets are held by a third party (the trustee) for the benefit of another party (the beneficiary). The beneficiary may be an individual or a group. The creator of the trust is known as a grantor or settlor.
A Trust can be the beneficial owner but the Trustee of the Trust is the legal owner of the shares and holds the shares on behalf of and for the benefit of the Trust. It is the Trustee who is the shareholder of the company.
Liability of Trustees
Trusts offer excellent asset protection for the beneficiaries. However, because trustees are the legal owners of the trust property, they are personally liable for any trust debts incurred.
The trustee of a trust has absolute discretion when it comes to distributing the trust's net income and capital gains to the beneficiaries of the trust. This means they can choose to distribute whatever they want to whomever they want.
Principal home owned by company or trust
A person may live in a home that is owned by a company or trust in which they have an interest. The home is assessed as the person's principal home IF the person has reasonable security of tenure.