Shelley Faulkner's Blog - Travels in the land of Probate Law...

Shelley Faulkner, Solicitor at AMD Solicitors, Bristol

March 2014 - Burdens and benefits

For those numerous and highly enthusiastic followers of my blog (largely members of my family) who have noticed a recent lack of blogging activity, I would like to apologise.  I will blame this on the plate-spinning world of work, children and study which is my life post embarking on the STEP (Society of Trust and Estate Practitioners) Diploma course last year.  I am now studying for my ‘Administration of Trusts’ exam in May.  This (despite my Tutor’s comments to the contrary) is surprisingly interesting. 

The course begins by exploring how the law in this country developed over the centuries into two parallel streams of rules.  The first, ‘the Common Law’, provided rigid inflexible laws to create clear rules and boundaries (in particular for the ‘common people’).  The second was the ‘Law of Equity’ which essentially softened the inflexibility of the common law by allowing the King (and subsequently the courts) to depart from the rules where this was necessary in the interests of fairness and justice.

At the same time, the way in which land and property could be held developed into two parts, also running as parallel streams.  The formal or ‘legal’ owner of the property had all the burdens of ownership, such as maintenance and payment of liabilities.  The ‘beneficial’ owner of the property had all the benefits of the property, particularly the right to receive the proceeds of sale.

This division between ‘legal’ and ‘beneficial’ ownership allowed the development in England and Wales of what is now the law of trusts.

In a trust the burdens, the duties and responsibilities, fall on the ‘trustee’, the legal owner of the trust property.  All the advantages and benefits of the trust belong to the ‘beneficiaries’, for whom the trust property is held.

Understanding how a trust is divided between the burdens (on the trustees), and the benefits (of the beneficiaries) is essential background to the complexity of the detail of trust law and administration, with which I am (hopefully) now getting to grips.

It is interesting to see that some of the main uses of trusts have not changed since the fifteenth century.  Even in medieval times tax was payable on death, and a trust could sometimes provide a way to side-step the rules.  Trusts were used then (as now) to pass property onto the next generation, and to preserve confidentiality, for example when providing for a mistress or children of extra-marital relationships.  And of course, trusts were  (as ever) used to save tax, or to try to do so.

Back to Index