Sep 18, 2021
(3) The Dual Ownership of Trust Property
The original emergence of trust is the separation of ownership and beneficial rights in order to escape the burden of feudal land ownership attached to land ownership. The court of Chancery not only imposes personal obligations on the holders of legal title, but also protects the interests of the beneficiaries of the trust in the trust property. The result is dual ownership: legal ownership is held by the trustee and equitable ownership is held by the beneficiary. This kind of division of ownership of trust property is difficult to be accepted by the civil law system, so scholars in the civil law system countries call this kind of legal ownership nominal ownership, while the equity ownership is called substantial ownership or beneficial right.
Taking the trust established by A mentioned above as an example, Bank A obtains one million yuan from A, but this is only the "nominal ownership", so Bank A cannot enjoy the one million yuan or any accompanying benefits, which means that the "nominal ownership" only grants the decentralization to the management office of the trust property of Bank A. As for all amounts under the special account, which shall belong to B when B reaches the age of 22, this is the "material ownership" of the trust property and belongs to B. In other words, the trustee obtains the nominal ownership of the trust property because of the trust, so he can manage the trust property. The beneficiary acquires the substantial ownership and can enjoy the benefits of the trust property and its management, and the interests it enjoys become “Trust Interests”.