TSEM6213 - Legal background to trusts & estates: splitting interests to create a trust
An absolute interest has two elements
- the legal interest, and
- the beneficial interest.
The owner of an absolute interest can split the two elements.
They can
- retain the legal interest and create beneficial interests in the asset
- retain the beneficial interest in the asset and transfer the legal interest to a nominee
- transfer the legal interest to trustees and create a beneficial interest in the asset.
Any of these can create a trust. It might be a bare trust.
They can effect this in their lifetime and create a settlement inter-vivos (between the living). Or they can effect it after their death by including suitable provisions in their will.