A trust is a legal arrangement that allows money, property, or other assets to be managed on behalf of someone else. It provides a structured way to ensure that these assets are used for the benefit of the intended individual(s), often under specific conditions outlined by the person who created the trust.
Key Parties Involved in a Trust
Every trust involves three main roles:
- The Settlor: This is the person who creates the trust by placing money or assets into it. In Scotland, the settlor is referred to as the “Granter.” The settlor also decides the terms of the trust, including who will benefit and how the assets should be managed or distributed.
- The Beneficiary: This is the individual or group of individuals who will benefit from the trust. Beneficiaries can receive income, assets, or other advantages from the trust, depending on its terms.
- The Trustee: This is the individual, group, or institution responsible for managing the trust. Trustees ensure the trust’s assets are managed in line with the settlor’s instructions and for the benefit of the beneficiary. Trustees have a legal duty to act in the best interests of the beneficiaries and to follow the terms of the trust.
