Are "Trusts" seen as separate legal entities by law?
Are "Trusts" seen as separate legal entities by law? Assistant at Law Assistant at Parklin Law There's a lot of confusion about whether trusts are considered separate legal entities by law. A trust is an arrangement in which a person, called the trustmaker, gives assets to another person, called the trustee, who holds them to be used for the benefit of a third party, called the beneficiary. In legal terms, a trust differs from a will in that it cannot be created by an individual; only a court can create a trust. Since trusts can be opened only by a court order, some people think that they are not real entities and do not have any legal rights. While technically true that trusts must be created by court order in all states except Alaska and Vermont, once created they are recognized as separate entities under law and have many of the same rights as individuals. A trust is generally seen as having three main parts: property, trusteeship, and beneficiaries. The property incl...