“A trust is any arrangement which exists whereby property is transferred with an intention that it be held and administered by the transferee for the benefit of another.” (Higgins v. Higgins (2017) 11 Cal.App.5th 648, 662.) Essentially, a trust is a legal relationship that allows a person to hold property for the benefit of another person.
In a trust relationship, there are typically three main people involved: (1) the settlor; (2) the trustee; and (3) the beneficiary. The settlor is the person that creates the trust and transfers the property he/she owns in the trust to be held by the trustee. The trustee is the person that administers the trust. The trustee holds legal title to the property transferred into the trust by the settlor and acts as a fiduciary to the beneficiary to protect the assets in the trust. The beneficiary holds equitable title to the trust property and is the person that benefits from the property in the trust. In some cases, the settlor and the trustee are the same person.
In sum, a trust is a fiduciary relationship where property is transferred by one person to another on behalf of a third party. At the Underwood Law Firm, our attorneys are more than familiar with trusts and the requirements that follow.