What is a Trust
The Oxford Dictionary definition of a trust is:
‘An arrangement whereby a person (a trustee) holds property as its nominal owner for the good of one or more beneficiaries.’
But what does this mean?
A trust is a legal agreement in which a person (the ‘trustee’) has agreed to ‘look after’ the assets (‘property’) of a second person (the ‘settlor’) for the benefit of a third person (the‘beneficiary’).
Example: John has given Karen £50 to look after for her son Peter. By doing this, a trust has been set up with John as the settlor, Karen as a trustee and Peter as a beneficiary.
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