Who owns the assets in a family trust?

The assets in a family trust are legally owned by the trust's trustee(s). He holds and deals with these assets under the auspices laid down in the trust deed, which is the legal document used to establish a trust and outline its rules. Although the title to the assets is held by the trustee legally, their holding of it is entirely in a fiduciary capacity: They must at all times act in the best interest of the beneficiaries and manage the assets strictly according to the terms of the trust and the applicable law.

A beneficiary of a family trust holds an equitable interest in the assets, meaning beneficiaries have a right to the benefit of the assets subject to the trust provided for by the trust deed, but they do not hold legal title over the assets. This may be formed when the settlor—that is, he who wants to create the trust—is placing manually, out of his estate, the ownership over certain assets into the trust. By this, one can say that when assets are transferred into the trust, they immediately stop being owned directly by the settlor, but instead fall under the control of the trustee.

This will be applied in the protection of family wealth, provision for future generations and asset management according to the wishes of the settlor for instance using the assets for particular reasons such as education and healthcare to the beneficiaries. The structure of the family trust also provided tax benefits and avoided probate, hence ensuring a smooth passage of the settlor's assets in the event of death. At One Pacific Trust, our vision is to be the leading provider of trust services.