• Kylie Simmonds-Cox

Who's Who in Trusts?


A Trust arises when the Settlor transfers assets to the Trustee to look after for the Beneficiaries. A Trust allows for the separation of ownership of assets from the right to enjoy them. The Trustees are therefore considered as being the legal owners and the beneficiaries are the equitable owners. But what do these roles mean?



The Settlor

This is the person who creates the Trust. They transfer the assets, such as money or property to the Trustee for them to look after as per the terms of the Trust. In theory, once the Trust is established the Settlor no longer owns the asset. Having transferred the asset to the Trustees means that they now have control and dominion over it. It is usual for the Settlor to detail terms that bind the Trustees and govern how they are to manage and dispose of the asset. The Settlor can include certain administrative or dispositive powers in favour of himself, so that he can influence the Trustees if needs be but care is advised here; the more significant the powers the more risk that it could be seen that the Settlor hasn't disposed of the asset. This could have significant taxation implications.


There is no limitation on who the Settlor can be - any individual or corporate entity capable of owning and transferring a property has capacity to be a Settlor and to create a Trust. This would not include a minor, i.e. someone aged under 18 years.


The Trustee

The Trustees are appointed by the Settlor to hold the legal title of the assets for the benefit of the beneficiaries. Any person (including a corporate entity) who is capable of owning a legal interest in property may be appointed as a Trustee. A minor cannot be appointed, nor a person who is lacking sufficient mental capacity.


Click here for more information regarding the role of a Trustee.


The Beneficiary

The Beneficiaries are the people who will benefit from the Trust assets. They may have a fixed interest in the Trust assets or this may be at the discretion of the Trustees. The beneficiary has the right to enforce the terms of the Trust and make sure the Trustee acts properly and in accordance with the terms. A beneficiary has an equitable ownership in the Trust assets and so they can enjoy the property and / or its income depending on the terms of the Trust.


The Protector

This is more relevant to offshore trusts. The role of the Protector is to protect the Trust assets and ensure that the terms of the Trust are carried out properly but he is not a Trustee. He does not have any legal rights over the Trust assets, his job is to oversee the Trustees. Any person or corporate entity may be appointed, however, it is more often than not a trusted friend or professional adviser of the Trustee.


Click here to learn more about Trusts and the reasons for setting one up.

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