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Posted: Feb 14 2011, 12:45 PM
Member No.: 1
Joined: February 14 2011
The Basics of Trusts
Trusts are very simple to understand. In fact, it was probably one of the first things in this whole process that I was actually able to fully grasp and then the rest just sort of blossomed from there.
To start off, the dictionary defines "trust" as follows:
Trust - reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence.
That's a very important definition because without that form of trust, there can be no society, no commerce, no law, no agreement of any kind. We'd all be paranoid hermits, living in a world of surrogacy. So you could say that the foundation of a trust is trust in another person. More specifically, a trust is when you trust someone with your property. Even more specifically is that a trust is a relationship between two parties in which one of them entrusts property to another for the benefit of the third. That is the legal description.
A trust is a contract, whether written or oral, expressed or implied. It can be any form of relationship that meets the above definition, and it doesn't even have to involve money, which is the form of trust that most people are familiar with (e.g. a trust fund).
Creating a trust is simple. We do it all the time, without even thinking about it. Any time you leave your child with grandma, you are creating a trust between you and grandma with your child as the property. That should be obvious, since who would leave their child with someone they don't trust, right?
Identifying a trust is a bit more difficult and for that you need to understand the basic components of what a trust is, of which there are only four:
The Creator - The one who initiates the formation of the trust by putting their property into the charge and care of another, called a trustee. In certain relationships, the creator may be called a grantor.
The Trustee - The one who possesses and takes care of and controls the property on behalf of the creator for the benefit of some third party, called a beneficiary. A trustee is also be known as a fiduciary or a steward.
The Beneficiary - The one who gets beneficial enjoyment of the property. It is the presence of the third-party beneficiary that distinguishes a trust from a trade, gift, or loan. In some cases, the creator or the trustee may also be a beneficiary if there is at least one other beneficiary.
The Property - In order for there to be a trust, there must be some transfer of property. This property is often called the corpus or res.
Thus, any relationship may be termed a trust if it can be described as a creator giving property to a trustee for the benefit of some beneficiary. It is possible for a trust to have more than one person fill one of the three primary positions. In fact, corporations and other such organizations often have entire boards of trustees.
There are many different kinds of trusts, depending on the details of the arrangement. Often, the positions can have different names that help identify them (such as grantor, bailor, and so forth), but the general relationship is still the same.
A trust is also, itself, a person. At least in law.
A human being is a consciousness, a living soul. It has vessels such as the mind and body that it travels in and uses to interact with the psychic and physical world. The soul lends its energy, its consciousness, to the vessel so it becomes animated. In this way, it appears to act on its own in the physical world and takes on the guise of a person - a natural person.
In the case of a trust, the trustee is a human being (a natural person). But in acting as trustee, they also lend consciousness to the trust and speak or act on its behalf, so the trust becomes an animated vessel that can appear to act on its own in the world of commerce, and thus is it also a person - an artificial person.
So in actuality, all persons are borrowed consciousness. You are trusting the vessel to act on behalf of the real man, which is the human soul within the vessel. Have we just created a homunculus?