Wealth

Trust Statement

What is a fiduciary statement?

Under U.S. law, a statement of trust is a document or oral statement that appoints a trustee to oversee assets held for the benefit of one or more other persons. These assets are held by trusts.

The document or statement also contains details of the purpose of the trust, the beneficiaries and how the trustee will administer the trust.

A fiduciary statement is sometimes called a nominee statement.

Understanding the Trust Statement

A trust statement not only specifies the trustee, but defines the trust to be created in considerable detail.

It identifies the assets held in the trust. It sets out who will benefit from the trust, who can amend or revoke the trust, as well as the name of the trustee and the powers the trustee has. A trustee can be a financial institution rather than an individual.

The statement may include instructions on how and when the beneficiary will receive the distribution.

This statement outlines the purpose or objectives of the trust and how the trustee will invest and manage the assets in support of the beneficiaries. It can also explain who will replace the trustee in the event of illness, incapacity, death or any other cause.

State laws vary

Some states require a written declaration of trust, while others allow oral declarations.

key takeaways

  • A fiduciary statement or nominee statement designates a trustee to oversee assets for the benefit of another person or persons.
  • The statement also describes the assets that will be held in the trust and how they will be managed.
  • State laws have different requirements for creating a trust statement.

State law also regulates how a trust statement applies to all those involved in the operation of the trust, including the settlor, trustee, and beneficiaries.

Trust Statement in the UK

A trust declaration has a different meaning in the UK and it establishes joint ownership of property held for the benefit of one or more individuals other than the official owner. It is governed by the Trustees Act 2000.

The definition of a trust declaration differs between the US and the UK.

With a declaration of trust, an individual can be considered the owner of the property even if the person is not named as the owner in the Land Registry. The trust itself can be referenced in the land registry to show that the listed owner is not the sole owner of the property.

For example, a person might buy a home with a mortgage. Some of the money for the purchase may have come from the person’s parents. Parents will split the cost and agree that they will receive a share of any profits from the sale of the property. The person who creates the trust statement will be the registered owner of the property title deed, but the parents can register their interest on the trust deed.

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