Art. 1440.

Concept of Trust

Trust - the fiduciary relationship between one person having an equitable ownership in property
and another owning the legal title to such property, the equitable ownership of the former entitling
him to the performance of certain duties and the exercise of certain powers by the latter for the
benefit of the former.

- a legal arrangement whereby a person transfers his legal title to property to another to be
administered by the latter for the benefit of a third party. It is a right of property held by one party for
the benefit of another.

Note: no trust can result from a contract of partnership formed for an illegal purpose. Since the contract is
null and void, no rights and obligations can arise therefrom.

Trust
A delivery of property in trust necessarily
involves a transfer of legal title, or at least a
separation of equitable interest and legal title,
with the legal title in the trustee.
Bail
a characteristic of a bailment that the bailee has
possession of, without legal title to, the property
subject to the bailment.

Trust Donation
an existing legal relationship and involves the a transfer of property and except in the case of a
separation of legal and equitable title gift in trust, involves a disposition of both legal
and equitable ownership.

Trust
involves an ownership, embracing a set of rights
and duties fiduciary in character which may be
created by a declaration without a consideration
Contract
a contract is a legal obligation based on an
undertaking supported by a consideration, which
obligation may or may not be fiduciary in
character.

Trust Debt
The beneficiary of a trust has a beneficial interest a creditor has merely a personal claim
in the trust property against the debtor
there is a fiduciary relation between a trustee and no such relation between a debtor and creditor.
a beneficiary

refers to a duty to deal with a specific property for a debt implies merely an obligation to
the benefit of another. pay a certain sum of money

Persons involved in the creation of an express trust

(1) The trustor (creator/settlor/grantor) - the person who intentionally creates or establishes the
trust.
 - He transfers legal ownership of property to a person for the
benefit of a third party, who owns the equitable little.

(2) The trustee - the person who takes and holds the legal title to the property in trust solely for
the benefit of another, with certain powers and subject to certain duties; and

(3) The beneficiary or cestui que trust - the person who has the equitable title or interest in the
property and enjoys the benefit of the administration of the trust
by the trustee.

- He may be a natural person or a legal entity.

- The trust may provide for more than one beneficiary.