when an estate is held in a trust, the owner holds legal title.
when an estate is held in a trust, the owner holds legal title.
when an estate is held in a trust which party holds legal title?
the owner
seisin is the important understanding that property owned in fee simple consists of two different parts; namely, 1) the naked legal title, and 2) the equitable (i.e., beneficial) title and that these two properties may not be forever separated. hence in landlord and tenant law the owner of the fee is well seised because he owns both the naked legal title and the equitable title. when the landlord rents his property the lessee is vested with equitable title and the peaceable enjoyment of the property during his or her tenure. when the lessee moves out, the equitable title is joined with the naked legal title and the gap in seisin is closed and the owner regains fee simple title. commonly when trusts are created the trustee owns (takes) legal title; the trustee administers the property for the benefit of the beneficiaries who are said to have equitable (beneficial) title. upon trust termination, the trustee conveys (distributes) legal title to the beneficiary, and again gap in seisin ends. the merrill lynch ready asset trust, the first of the money market accounts when established in the 1970s, named a newly born son of one of the merrill lynch executives by whom to measure the duration as 21 years beyond the demise of that child. at the end of the period the assets of the trust then are to be distributed to the beneficiaries and the trust extinguished. common english practice was to create a trust whose term ended upon the demise of the last living heir of her britannic majesty queen victoria whose descendants are well known but even that practice is discouraged. but the southland royalty trust was created to endure until the demise of the last living descendant of signors of the declaration of independence, who are unknown thereby creating an entity that likely violates the rule against perpetuities because it can never end hence the gap in seisin never can close.
seisin
deeds of trust differ from mortgages in that deeds of trust always involve at least three parties, where the third party holds the legal title, while in the context of mortgages, the mortgagor gives legal title directly to the mortgagee. in either case, "equitable" title remains with the borrower. both mortgages and deeds of trust are essentially security instruments in the form of conveyances; that is, they appear to provide on their face for absolute conveyances of legal title, but it is implicitly understood that the borrower is retaining equitable title and the conveyance is intended to merely create a security interest. this confusing situation is a legacy of the archaic (and now-obsolete) common law requirement of livery of seisin, under which english common law courts had refused to enforce shifting fees or springing freehold interests (that is, a gage for years that was supposed to automatically expand to fee simple title if the underlying debt was not repaid).
deed of trust (real estate)