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Trustees

The trustee can be either a person or a legal entity such as a company. There can be multiple trustees, in which case the trust should provide a mechanism for the trustees to make decisions. A trust generally will not fail solely for want of a trustee; if there is no trustee, whoever has title to the trust property will be considered the trustee. A court may appoint a trustee if necessary.

The trustees will be the legal owners of the trust property. They can, for example, sign bank transactions, make investments or rent out a house (if part of the trust property). By default, being a trustee is an unpaid job. However, in modern times trustees are often lawyers or other professionals who cannot afford to work for free. Therefore, often a trust document will state specifically that trustees are entitled to reasonable payment for their work.

A trust can be created without the trustees having any knowledge of its existence. However, it is usual for the settlor to make arrangements with potential trustees (for example, friends or a professional) before creating the trust.

Beneficiaries

The beneficiaries are beneficial (or equitable) owners of the trust property. Either immediately or eventually, they will receive income from the trust property or they will receive the property itself. The extent of an individual beneficiary's interest depends on the wording of the trust document. One beneficiary may be entitled to income (for example, interest from a bank account), whereas another may be entitled to the entirety of the trust property when he turns 25. The settlor has much discretion when creating the trust, subject to limitations imposed by law.