In a trust arrangement, who retains legal title to the property?

In a trust arrangement, the trustee retains legal title to the property. This arrangement is foundational to how trusts operate. The legal title means that the trustee has the authority to manage the property and make decisions regarding it, all in accordance with the terms of the trust and for the benefit of the beneficiaries.

The role of the trustee is crucial because they are responsible for the administration of the trust. They hold the property on behalf of the beneficiaries, who have equitable interest in the property but do not have legal title. This separation of legal and equitable ownership is key to ensuring that trust assets are managed and distributed as specified in the trust document.

The individual who created the trust, often referred to as the grantor or settlor, typically transfers the legal title to the trustee but does not retain it. Beneficiaries, on the other hand, benefit from the trust's assets but do not have legal claim over the property itself. Additionally, the state government does not retain legal title in this context; it might only become involved in matters of trust if legal issues arise or if an estate tax is concerned. Thus, the trustee's role as the holder of legal title is essential for upholding the fiduciary duties inherent in trust law.