Trust And Other Legal Concept

When you give your property or asset to someone to hold or use  for the benefit of your dependants , families  or other purposes like charitable purposes trust is said to have been created, you who gave the property or asset  you are called a settlor,  creator and founder while the person whom you gave the property to is called a trustee and the person whom the trustee is going to hold the property for his benefit or interest is called the beneficiary.

People do  sometimes mistakes the term trust  for other legal  term as a matter of fact some persons or even some  lawyers do  interchange trust for other legal concept  like agency, contract , administration of Estate , bailment , and power and although the term trust resembles and similar to these other legal concept but there are still distinct and different , however, this is not to say that they are no resemblance or similarity of trust with other legal concept .

Hence, it is essential we compare the concept of trust  with other legal concept , so as to see the resemblance and Similarity and to fish out the differences.

(1)  Bailment and trust
Bailment is a disposit of chattel in possession of person called the Bailee and bailment is putting the Bailee in possession of chattel to hold or use for specific purpose and the chattel will return back to the bailor or according to his instruction or directions.The similarity of Bailment and trust is that bailment is just a specie form of trust and both bailment and trust involves the holding of property for the benefit of someone in trust , the trustee is said to hold property for the benefit of the beneficiary while in bailment the bailee is said to hold property for the benefit of the bailor

While trust and bailment resemble or similar there exist a clear and distinct difference
1. Trust is recognized at equity while bailment is recognized at common law
2. The duties of Bailee is minimal and different from that of the trustee
3. In trust the general property is in the trustee while in Bailment, the bailee only have special property because the general property is in the bailor. 
4. Under bailment only chattel can be bailed but any property can be subjected to trust

(2)  Agency and Trust
An Agency is a relationship that subsist between two persons one person called the principal( boss) and the other person called the Agent and the agent is vested with that legal authority to alter the relationship of the principal with a third party , in the case of Mikano International Ltd v Ehumadu the court of appeal per Aminat Augie JCA defined an agency as follows: An agency is a relationship that exist between two person , one who impliedly or expressly consent that the other should represent him or act on his behalf and the other person who consent to represent or act on behalf of the former so to act and the person whom is to be represented or whose behalf an act is to be done is called the principal and the one whose is to represent or act on behalf of another is called the Agent.

We can infer that agency are similar or resemble to some extent with trust  and this can be seen in this fashion
1. In both the trust and agency the trustee and the agent are subject to fiduciary obligations towards the beneficiaries and the principals and both the trustee and the agent are expected to act in good faith in discharging their duty
2. Both the agent and trustee must not all their interest to conflict with their duties
3. Both the trustee and the agent are  not allow to make secrete profit and hence Both are under law expected to account for all the profits they make on the property they hold in the execution of their duties
4. Both the trustee and the agent are to work personally in their business hence the principle delegatus  non potest delegare applies to them.

Notwithstanding their resemblance and similarities their are clear and distinct differences between the agency and trust and these differences can be inferred as follows.
1. The agency is governed by common law while trust is govern by Equity
2. The agency relationship is borne out of contract between the principal and the agent while trust relationship between the beneficiaries and the trust is not borne out contract
3. The property is vested on the trustee the property is   not vested on the agent
4. The in trust the trustee cannot involve the beneficiaries in liabilities while in agency the agent can involve the principal in liabilities.

(3) Trust and contract
should this  two concept be confused? my are is certainly no, although agreement is highly essential in the formation of a contract and many and also may trust can have their origin from agreement and this make them similar. Notwithstanding the similarity of the two concept,  there exist a plethora of differences and the two relationships differs in the following ways
1. While contractual relationship is legal , Trust relationship relationship relationships is equitable
2. The contractual relationship give rise to right in rem Trust relationship give rise to right in personam
3. Except a contract is under a seal it must be supported by a consideration before it can be enforced while a trust can be enforced by a beneficiary even though he is a volunteer once a trust have been completely created.
4. Agreement is an essential element in the formation of a contract but in trust agreement is not essential been that some trust can be created by way of grant without agreement of either the trust or the beneficiary

5. In contract it is the principle of the common law that only the parties to an agreement can enforce the agreement this is known as the doctrine of privity to contract,  however trust serves as an exception to this doctrine that is in equity a person who is  not a party to contract can enforce a contract, meanwhile there a contract whereby a party enter as a trustee of the benefit of the contract for the benefit of a third party and as such where the contract is failed to be performed the trust can institute a proceeding in his name to enforce the contract and where the trustee failed to perform this the third or beneficiary can institute a proceedings to enforce the contract by joining the trustee as a co-defendant.

(4) Trust  and personal representative
The similarity between personal representative and trust touches on  fusion of authority where one person can be both a trustee and the same time a personal representative and the provision of Trustee Act 1893 and Trustee law of 1959 applies to both concept since trust can be created in such  a way that one person can be both Trustee and a personal representative of the deceased estate for instance a will may created a trust in respect of  a particular property or asset and appoint one person to be the executor of the will and still appoint the same person to be Trustee of the trust created by the will and this situations however make the distinction between personal representative and trust blurred . Notwithstanding the similarity there exit a clear and distinct differences between the two concept and this we fashion as follows.
1. In trust what is expected of the Trustee or the objective of the Trustee in trust is to hold and administer the property he hold in trust for the benefit of the beneficiary in accordance with the terms of the trust that bind him and on the other in administration of Estate of the deceased the objective of the personal representative is to wind up the deceased person estate and settle the debt of the deceased and  distribute the  to the beneficiary  whoever is entitled to benefit from the deceased person estate.

2. The whole ownership of the deceased person's estate  in the administration of Estate is vested in the personal representative,  the beneficiary does not not have beneficial interest of any part of the deceased person asset or estate but they have right to ensure a due administration of the deceased person estate among them , on the other hand under a trust the beneficial interest in the property is vested on the beneficiary while the trustee only have a bare ownership of the trust property.
3. An action, suit or claim  by the beneficiary to recover property held on trust is barred after 6yrs while and while in respect to a property or asset of the deceased held by the personal representative an action or claim to recover property by the beneficiary is barred after 12yrs
4. Property or asset of the deceased held by several  personal representative one of the several  personal representative may dispose of the pure personality of the deceased like things that are not real property like land the deceased pure personality we are talking about are things like his cars  , jewelries,and clothes on the other in trust the trustee must act jointly in disposing property held on trust whether real or personal property
5. The provision of the Trustee Act of 1893 and The Trustee Law of 1959 in relation to appointments and retirement of the trustee does not apply to personal representative.

(5) Trust and powers
powers is the legal authority vested on a body or person to  deal with property that is  not his own , the distinction between trust and power seems to some what blurred in cases at time where trust created looks like power for instance the case of trust power it is difficult to ascertain whether is trust or power that has been created in trust power the trustee is vested with power with discretion   to use and apply the trust property or income or profit realize on among the groups of the trust is he deemed fit. Notwithstanding this difficulties there is still a clear and distinct differences between trust and power.
1. Trust is imperative while power is discretionary trust is imperative in the sense that the trust is compel to act in accordance with the settlor’s direction and the trust can compel the trustee in equity to discharge his duty as was directed by the settlor for his benefit
2.The object power is certain while the object to trust is certain for a trust to be valid certainty of object is an essential element and requirement while in power certainty of object is not a requirement for the validity of power.
3. Trust is equitable that means  it is the product of the principle of equity while power is legal


You must be logged in to post a comment.