What is a Trust? Not many people understand what a trust is. Even lawyers. I had a lawyer call me the other day about issuing a notice to complete for a property purchase where the buyer was ‘a trust’. He had no idea. A trust is not a legal person. A human is a separate legal person. And a company is a legal person. A company can sue or be sued. A trust is not a separate entity either. A trust cannot enter into a contract as it is not a legal person. A trust is nothing but a relationship with equitable obligations. A owns X for B = the simple definition. For a trust to exist there must be A trustee Property Beneficiary (one or more) Obligations The legal entity is the trustee. The easiest way to understand the concept is to consider a mother opening a bank account for her 1 year old baby. The mother is the trustee The baby is the beneficiary The money is the property And the obligations arise out of the relationship - laws of equity and statute such as the various Trustee Acts. To make things confusing for tax purposes a tax is a separate ‘entity’. A trust does its own trust return similar to that of a partnership. (A partnership is also not a separate legal person). It takes many years for the trust concepts to sink in. I recall when I set up a family trust many years ago the conveyancer abused me when she asked who is the purchaser and I said “The trust”. This is the basics, things just get more complicated from here.