Bundle of rights

The bundle of rights is a metaphor to explain the complexities of property ownership.[1] Law school professors of introductory property law courses frequently use this conceptualization to describe "full" property ownership as a partition of various entitlements of different stakeholders.[2]

The bundle of rights is commonly taught in US first-year law school property classes to explain how a property can simultaneously be "owned" by multiple parties. The term, "bundle of rights," likely came into use during the late 19th century and continued to gain ground thereafter. Prior to that, the idea of property entailed more the owner's dominion over a thing, placing restrictions on others from interfering with the owner's property. "Bundle of rights," however, implies rules specifying, proscribing, or authorizing actions on the part of the owner.[3]

Ownership of land is a much more complex proposition than simply acquiring all the rights to it. It is useful to imagine a bundle of rights that can be separated and reassembled. A "bundle of sticks" - in which each stick represents an individual right – is a common analogy made for the bundle of rights. Any property owner possesses a set of "sticks" related directly to the land.[4]

For example, perfection of a mechanic's lien takes some, but not all, rights out of the bundle held by the owner. Extinguishing that lien returns those rights or "sticks" to the bundle held by the owner. In the United States (and under common law) the fullest possible title to real estate is called "fee simple absolute." Even the US federal government's ownership of land is restricted in some ways by state property law.

Variations on the concept

Variations on the division between public and private property use can be found throughout the world. While the bundle of rights concept is strongly rooted in common law, there are comparable ideas in civil law systems and religious law systems. National, sub-national, and municipal laws strongly influence what title owners can do with their property in terms of physical development. Quasi-governmental bodies (such as utility companies) are also permitted to create easements across private property.

Historically the degrees of individual and community control over real property have varied greatly. The differences between capitalism, despotism, socialism, feudalism, and traditional societies often define different standards for land ownership. The bundle of rights concept looks much different when examined by different types of societies. For instance, a laissez-faire government would allow a much different bundle of rights than a communist government.

Bundle of Rights- Simply put are rights inherent with the property. The right to use, the right to sell, right to mortgage, right to lease, right to give away, and right to enter. Or the right to refuse to exercise any of these rights. This is subject to certain limitations.

Applications

Community land trusts and land banking are examples of efforts to rearrange the bundle of rights. This is typically done by dividing the responsibilities of ownership and management from the rights to use the property. A typical community land trust strategy is to hold ownership over the land and sell the structural improvements (residential or other buildings) to low-income homebuyers. This allows people to buy a home at a price far below the market rate and to realize the benefits of their property value improving.

Real Estate Investment Trusts divide up the bundle of rights in order to allow commercial investments in real property. These legal structures are becoming more common throughout the developed world.

Squatting presents a non-economic way for people to transfer parts of the bundle of rights. Depending on the applicable laws, a squatter can acquire property rights by simply occupying vacant land for an extended period of time. Areas with high concentrations of squatters are sometimes thought of as informal settlements. Squatters face great instability due to their lack of title and governmental efforts at "blight removal".

"Squatting" can result in "adverse possession", that in common law, is the process by which title to another's real property is acquired without compensation, by holding the property in a manner that conflicts with the true owner's rights for a specified period of time. Circumstances of the adverse possession determine the type of title acquired by the adverse possessor, which may be fee simple title, mineral rights, or another interest in real property.

Examples of Component Rights

This table breaks down some of the various rights involved in real property ownership. Several of these rights can be transferred between different parties through sale or trade. Third parties can obtain the rights to access and profit from several of the public use rights without the consent of the title owner. This is often the case with resource extraction companies such as mines.

Title Owner Public Use Government Third Party

For example, a husband and wife can be owners (technically, title owners) of real property that is also encumbered by a mortgage and a mechanics lien. Their neighbor may have an easement for a utility line, and a license for entry and exit to a nearby plot of land. Airplanes have the right to fly through their airspace. Constitutionally, the state and federal governments always hold the right to condemnation, also called eminent domain, and the government at multiple levels retains various regulatory rights such as environmental regulation, zoning, and building code enforcement.

See also

References

  1. ^ http://scholarship.law.uc.edu/cgi/viewcontent.cgi?article=1164&context=uclr
  2. ^ http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=4601&context=fss_papers
  3. ^ Klein, Daniel B. and John Robinson. "Property: A Bundle of Rights? Prologue to the Property Symposium," Econ Journal Watch 8(3): 193-204, Sept 2011.[1]
  4. ^ E.g., United States v. Craft, 535 U.S. 274, 278, 152 L.Ed. 2d 437, 446, 122 S.Ct. 1414, 1420 (2002) (describing the "bundle of sticks" as a "collection of individual rights which, in certain combinations, constitute property").
  • Daniel R. Mandelker (2003). Land use law. [Charlottesville, Va.]: LexisNexis Matthew Bender. ISBN 0-327-16269-4.
  • Introduction to Property Rights: A Historical Perspective
  • Benedikt Koehler, Muhammad's conception of property as a bundle of rights, Economic Affairs, vol. 35, number 1, Feb 2015
  • Introduction to Property Rights: A Historical Perspective
Akiba v Commonwealth

Akiba on behalf of the Torres Strait Regional Seas Claim Group v Commonwealth of Australia [2013] HCA 33; 250 CLR 209 (7 August 2013) is a landmark Australian judgment of the High Court. The matter related to Native title rights, their extension to other persons and their extinguishment by Statute.

Beaver Creek, Colorado

Beaver Creek is an unincorporated community in Eagle County, Colorado, United States. Beaver Creek is located immediately south of the town of Avon and encompasses the Beaver Creek Resort and adjacent business, lodging, and residential areas. The U.S. Post Office at Avon (ZIP Code 81620) serves Beaver Creek postal addresses.

Bundle

Bundle or Bundling may refer to:

In marketing:

Product bundling, a marketing strategy that involves offering several products for sale as one combined product

Bundling (fundraising), when donations from many individuals are collected by one person and presented to the recipient

Bundling (public choice), a similar concept to product bundling that occurs in electoral republicsIn economics:

A bundle is a set of one or more goods.In mathematics:

Bundle (mathematics), a generalization of a fiber bundle dropping the condition of a local product structure

Fiber bundle, a topology space that looks locally like a product spaceIn medicine:

Bundle of His, a collection of heart muscle cells specialized for electrical conduction

Bundle of Kent, an extra conduction pathway between the atria and ventricles in the heartIn computing:

Bundle (OS X), a type of directory in NEXTSTEP and OS X

Bundle (software distribution), a package containing a software and everything it needs to operate together with some hardware or additional software (sometimes adware).Other uses:

Bundle adjustment, a photogrammetry/computer vision technique

Bundle conductor (power engineering)

Bundle of rights (property law)

Bundle theory (philosophy)

Bundled payment, a method for reimbursing health care providers

Bundles (album), a 1975 album by Soft Machine, including a song of the same title

Bundling (antitrust law), the setting of the total price of a purchase of several products or services from one seller over a period at a lower level than the sum of the prices of the products or services purchased separately from several sellers.

Bundling (packaging), the process of using straps to bundle up items

Bundling (tradition), the traditional practice of wrapping one person in a bed accompanied by his/her courter

Eileen "Bundle" Brent, an Agatha Christie character

Optical fiber bundle, a cable consisting of a collection of fiber optics

Sacred bundle a wrapped collection of sacred items, held by a designated carrier, used in Indigenous American ceremonial cultures

The Bundles, an anti-folk supergroup, or The Bundles (album), their only album

Chose

Chose (pronounced: , French for "thing") is a term used in common law tradition to refer to rights in property, specifically a combined bundle of rights. A chose describes the enforcement right which a party possesses in an object. The use of Chose extends from the English use of French within the courts. In English and commonwealth law, all personal things fall into one of two categories, either choses in action or choses in possession. English law uses a chose to refer to a bundle of rights, traditionally relating to property which may be utilised in certain circumstances. Thus, a Chose in action refers to a bundle of personal rights which can only be enforced or claimed by a chose-holder bringing an action through the court to enforce the action. In English law, this category is enormously wide. This is contrasted with a Chose in Possession which represents rights which can be enforced or acquired by taking physical possession of the chose. This may be, for example a legal mortgage. Both choses in possession and choses in action create separate proprietary interests. What differs between each is the method in which each chose may be enforced. This is dependent on the possessory nature of the reference object.

Alternative, historical uses includes a chose local, a thing annexed to a place, such as a mill; a chose transitory, something movable that can be carried from place to place.

Customary land

Customary land is land which is owned by indigenous communities and administered in accordance with their customs, as opposed to statutory tenure usually introduced during the colonial periods. Common ownership is one form of customary land ownership.

Since the late 20th century, statutory recognition and protection of indigenous and community land rights continues to be a major challenge. The gap between formally recognized and customarily held and managed land is a significant source of underdevelopment, conflict, and environmental degradation.In the Malawi Land Act of 1965, "Customary Land" is defined as "all land which is held, occupied or used under customary law, but does not include any public land". In most countries of the Pacific islands, customary land remains the dominant land tenure form. Distinct customary systems of tenure have evolved on different islands and areas within the Pacific region. In any country there may be many different types of customary tenure.The amount of customary land ownership out of the total land area of Pacific island nations is the following: 97% in Papua New Guinea, 90% in Vanuatu, 88% in Fiji, 87% in the Solomon Islands, and 81% in Samoa.

Estate in land

An estate in land is an interest in real property that is or may become possessory.

In the legal systems of almost every country, the ultimate true "owner" of all land is the sovereign, which for a republic is the whole people of a society, which with sovereign, exclusive control over a well-defined tract of land, may be called a "state". Private parties own not the underlying land, but claims on parcels of land, which taken together define the estate for that parcel. This superior ownership is the basis for taking the land through eminent domain. However, the claims that define the estate are themselves personal property.

This should be distinguished from an "estate" as used in reference to an area of land, and "estate" as used to refer to property in general.

In property law, the rights and interests associated with an estate in land may be conceptually understood as a "bundle of rights" because of the potential for different parties having different interests in the same real property.

In the Courts of the Conqueror

In the Courts of the Conqueror: The 10 Worst Indian Law Cases Ever Decided is a 2010 legal non-fiction book by Walter R. Echo-Hawk, a Justice of the Supreme Court of the Pawnee Nation, an adjunct professor of law at the University of Tulsa College of Law, and of counsel with Crowe & Dunlevy.

Keystone Bituminous Coal Ass'n v. DeBenedictis

Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987), is an important United States Supreme Court case interpreting the Fifth Amendment's Takings Clause. In this case, the court upheld a Pennsylvania statute which limited coal mining causing damage to buildings, dwellings and cemeteries through subsidence.

Livestock keepers' rights

Livestock Keepers' Rights are a bundle of rights that would support the survival of small-scale livestock keepers such as pastoralists, smallholders and family farms in a general policy environment that favours large-scale industrial modes of livestock production.

The term "Livestock Keepers' Rights" was coined during the World Food Summit in 2002 by civil society attending the Forum for Food Sovereignty to flag the role of livestock keepers in animal genetic resource management. It alluded to "Farmers' Rights" as known from the International Treaty on Plant Genetic Resources for Food and Agriculture that had been recently concluded.

Paracopyright

Paracopyright ("pseudocopyright" or "metacopyright") is legal protection above and beyond traditional copyright. The most often cited example is "legal protection for technical measures" from the 1996 WIPO Internet treaties. Paracopyright provisions in these treaties are not about the term or scope of copyright, but instead are about providing legal protections for the technologies that may be used by copyright holders.

Paracopyrights afford legal protection to technologies that claim to be used to protect copyrights, but that are ineffective in that goal. A technical measure can not stop a technically sophisticated person who wishes to infringe copyright. To use the "digital locks" analogy, there is no need to "pick the lock" as the keys necessary to decode the content are embedded within authorized access technology. Both the locked content and the technology containing the key are commercially available to an infringer. Once a single person decodes a technical measure, the decoded content can be made available to others in the same way as if the technical measure never existed.

The effect of these technical measures are to impose specific contractual license agreements on those conforming to copyright law. As a concept, therefore, paracopyrights are perhaps better understood as a part of contract law and not copyright law. Unfortunately, important regulations regarding consumer protection and the "freedom to contract" are not imported directly into paracopyright laws, potentially creating imbalances in the law and harmful unintended consequences.

Copyright is traditionally understood as a statutorily defined bundle of exclusive rights provided to copyright holders. An infringement of copyright takes place when someone exercises one or more of the copyright holder’s exclusive rights without his or her permission. Anti-circumvention and anti-device provisions do not fit under this paradigm of a bundle of exclusive rights. On one hand, a copyright owner has the exclusive right to copy his or her work, and that exclusive right is infringed when someone else copies the work without permission. It is quite another story, however, to think about copyright holders having the exclusive right to circumvent TPMs (Technical Protection Measure) that they apply to their works, and the exclusive right to make and distribute devices that enable or facilitate circumvention of TPMs. Even assuming that this problem could be overcome, attempting to force anti-circumvention and anti-device provisions to fit the mold of the bundle of rights paradigm seems to necessitate adding a number of related rights to the bundle, including the exclusive right to apply a TPM to a copyright work.

Parental responsibility

Parental responsibility

Parental responsibility (access and custody), in the European Union, refers to the bundle of rights and privileges that children have with their parents and significant others as the basis of their relationship

Parental responsibility (criminal), in Canada and the United States, refers to the potential liability that parents may incur for the acts and omissions of their children

Property

Property, in the abstract, is what belongs to or with something, whether as an attribute or as a component of said thing. In the context of this article, it is one or more components (rather than attributes), whether physical or incorporeal, of a person's estate; or so belonging to, as in being owned by, a person or jointly a group of people or a legal entity like a corporation or even a society. Depending on the nature of the property, an owner of property has the right to consume, alter, share, redefine, rent, mortgage, pawn, sell, exchange, transfer, give away or destroy it, or to exclude others from doing these things, as well as to perhaps abandon it; whereas regardless of the nature of the property, the owner thereof has the right to properly use it (as a durable, mean or factor, or whatever), or at the very least exclusively keep it.

In economics and political economy, there are three broad forms of property: private property, public property, and collective property (also called cooperative property).Property that jointly belongs to more than one party may be possessed or controlled thereby in very similar or very distinct ways, whether simply or complexly, whether equally or unequally. However, there is an expectation that each party's will (rather discretion) with regard to the property be clearly defined and unconditional, so as to distinguish ownership and easement from rent. The parties might expect their wills to be unanimous, or alternately every given one of them, when no opportunity for or possibility of dispute with any other of them exists, may expect his, her, its or their own will to be sufficient and absolute.

The Restatement (First) of Property defines property as anything, tangible or intangible whereby a legal relationship between persons and the state enforces a possessory interest or legal title in that thing. This mediating relationship between individual, property and state is called a property regime.In sociology and anthropology, property is often defined as a relationship between two or more individuals and an object, in which at least one of these individuals holds a bundle of rights over the object. The distinction between "collective property" and "private property" is regarded as a confusion since different individuals often hold differing rights over a single object.Important widely recognized types of property include real property (the combination of land and any improvements to or on the land), personal property (physical possessions belonging to a person), private property (property owned by legal persons, business entities or individual natural persons), public property (state owned or publicly owned and available possessions) and intellectual property (exclusive rights over artistic creations, inventions, etc.), although the last is not always as widely recognized or enforced. An article of property may have physical and incorporeal parts. A title, or a right of ownership, establishes the relation between the property and other persons, assuring the owner the right to dispose of the property as the owner sees fit.

Property rights (economics)

Property rights are theoretical socially-enforced constructs in economics for determining how a resource or economic good is used and owned. Resources can be owned by (and hence be the property of) individuals, associations or governments. Property rights can be viewed as an attribute of an economic good. This attribute has four broad components and is often referred to as a bundle of rights:

the right to use the good

the right to earn income from the good

the right to transfer the good to others

the right to enforce property rightsIn economics, property is usually considered to be ownership (rights to the proceeds generated by the property) and control over a resource or good. Many economists effectively argue that property rights need to be fixed and need to portray the relationships among other parties in order to be more effective.

Quasi-property

Quasi-property is a legal concept, in which some rights similar to ownership may accrue to a party who does an act which benefits society as a whole. Black's Law Dictionary defines "quasi" as being "almost" or "resembling" - but not actually the same as the suffix item. Property Law gives the owner of real property or personal property a "bundle of rights" for beneficial use, such as the right to sell the property or right to lifetime use of the property.

Reversion (law)

A reversion in property law is a future interest that is retained by the grantor after the conveyance of an estate of a lesser quantum that he has (such as the owner of a fee simple granting a life estate or a leasehold estate). Once the lesser estate comes to an end (the lease expires or the life estate tenant dies), the property automatically reverts (hence reversion) back to the grantor.

A reversion interest is logically similar, but not legally identical, to the rights retained by someone who lends his property to another for a limited time. Although the bailee would have the right to possess the property during the limited duration, these rights are neither permanent nor exclusive. When the time comes, the property rights of possession will terminate and return to the holder of the reversion.

Reversions are commonly created in real property transactions, particularly during lease arrangements as well as devise (the transfer of real property through a will). In the context of a will, a testator may devise a simple life estate to a devisee. The testator may retain the reversion in the estate or give it to another individual. The owner of the life estate will retain ownership of the property during the devisee's life, and may freely alienate this interest. However, upon the death of the devisee the life estate will terminate and ownership of the real-property will fully vest in the holder of the reversion.

A tenancy for years is a simple illustration of a reversion interest in the context of leasing arrangements. An owner of real-property becomes a lessor by transferring a bundle of rights - including a right of entry - to the leasee for a certain period of time. The lessor typically retains a reversion interest in the property which will mature after the lease expires. A common example of this transaction is the leasing of an apartment to a tenant for a one-year period. When the lease expires, the rights of the leasee are terminated and exclusive ownership of the property returns to the lessor.

Reversion should not be confused with the possibility of reverter created in the grant of a fee simple determinable. Although both result in the return of the land to the original grantor or his heirs, reversions occur upon the natural expiration of the grantee's estate, while the possibility of reverter actively ends the grantee's otherwise-indefinite estate as a consequence of the grantee's failure to comply with the condition contained in the grant.

Unlike some other future interests, reversions have always been fully alienable.

Secured loan

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral, and if the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally loaned to the borrower. An example is the foreclosure of a home. From the creditor's perspective, that is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. If the sale of the collateral does not raise enough money to pay off the debt, the creditor can often obtain a deficiency judgment against the borrower for the remaining amount.

The opposite of secured debt/loan is unsecured debt, which is not connected to any specific piece of property. Instead, the creditor may satisfy the debt only against the borrower, rather than the borrower's collateral and the borrower. Generally speaking, secured debt may attract lower interest rates than unsecured debt because of the added security for the lender; however, credit risk (e.g. credit history, and ability to repay) and expected returns for the lender are also factors affecting rates. The term secured loan is used in the United Kingdom, but the United States more commonly uses secured debt.

Tangible property

Tangible property in law is, literally, anything which can be touched, and includes both real property and personal property (or moveable property), and stands in distinction to intangible property.In English law and some Commonwealth legal systems, items of tangible property are referred to as choses in possession (or a chose in possession in the singular). However, some property, despite being physical in nature, is classified in many legal systems as intangible property rather than tangible property because the rights associated with the physical item are of far greater significance than the physical properties. Principally, these are documentary intangibles. For example, a promissory note is a piece of paper that can be touched, but the real significance is not the physical paper, but the legal rights which the paper confers, and hence the promissory note is defined by the legal debt rather than the physical attributes.A unique category of property is money, which in some legal systems is treated as tangible property and in others as intangible property. Whilst most countries legal tender is expressed in the form of intangible property ("The Treasury of Country X hereby promises to pay to the bearer on demand...."), in practice banknotes are now rarely ever redeemed in any country, which has led to banknotes and coins being classified as tangible property in most modern legal systems.

Title (property)

In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, possession and title may each be transferred independently of the other. For real property, land registration and recording provide public notice of ownership information.

In United States law, typically evidence of title is established through title reports written up by title insurance companies, which show the history of title (property abstract and chain of title) as determined by the recorded public record deeds; the title report will also show applicable encumbrances such as easements, liens, or covenants. In exchange for insurance premiums, the title insurance company conducts a title search through public records and provides assurance of good title, reimbursing the insured if a dispute over the title arises. In the case of vehicle ownership, a simple vehicle title document may be issued by a governmental agency.

The main rights in the title bundle are usually:

Exclusive possession

Exclusive use and enclosure

Acquisition

Conveyance, including by bequest

Access easement

Hypothecation

PartitionThe rights in real property may be separated further, examples including:

Water rights, including riparian rights and runoff rights

In some U.S. states, water rights are completely separate from land—see prior appropriation water rights

Mineral rights

Easement to neighboring property, for utility lines, etc.

Tenancy or tenure in improvements

Timber rights

Farming rights

Grazing rights

Hunting rights

Air rights

Development rights to erect improvements under various restrictions

Appearance rights, often subjected to local zoning ordinances and deed restrictionsPossession is the actual holding of a thing, whether or not one has any right to do so. The right of possession is the legitimacy of possession (with or without actual possession), the evidence for which is such that the law will uphold it unless a better claim is proven. The right of property is that right which, if all relevant facts were known (and allowed), would defeat all other claims. Each of these may be in a different person.

For example, suppose A steals from B, what B had previously bought in good faith from C, which C had earlier stolen from D, which had been an heirloom of D's family for generations, but had originally been stolen centuries earlier (though this fact is now forgotten by all) from E. Here A has the possession, B has an apparent right of possession (as evidenced by the purchase), D has the absolute right of possession (being the best claim that can be proven), and the heirs of E, if they knew it, have the right of property, which they cannot prove. Good title consists in uniting these three (possession, right of possession, and right of property) in the same person(s).

The extinguishing of ancient, forgotten, or unasserted claims, such as E's in the example above, was the original purpose of statutes of limitations. Otherwise, title to property would always be uncertain.

Trust law

A trust is a three-party fiduciary relationship in which the first party, the trustor or settlor, transfers ("settles") a property (often but not necessarily a sum of money) upon the second party (the trustee) for the benefit of the third party, the beneficiary.A testamentary trust is created by a will and arises after the death of the settlor. An inter vivos trust is created during the settlor's lifetime by a trust instrument. A trust may be revocable or irrevocable; in the United States, a trust is presumed to be irrevocable unless the instrument or will creating it states it is revocable, except in California, Oklahoma and Texas, in which trusts are presumed to be revocable until the instrument or will creating them states they are irrevocable. An irrevocable trust can be "broken" (revoked) only by a judicial proceeding.

Trusts and similar relationships have existed since Roman times.The trustee is the legal owner of the property in trust, as fiduciary for the beneficiary or beneficiaries who is/are the equitable owner(s) of the trust property. Trustees thus have a fiduciary duty to manage the trust to the benefit of the equitable owners. They must provide a regular accounting of trust income and expenditures. Trustees may be compensated and be reimbursed their expenses. A court of competent jurisdiction can remove a trustee who breaches his/her fiduciary duty. Some breaches of fiduciary duty can be charged and tried as criminal offences in a court of law.

A trustee can be a natural person, a business entity or a public body. A trust in the United States may be subject to federal and state taxation.

A trust is created by a settlor, who transfers title to some or all of his or her property to a trustee, who then holds title to that property in trust for the benefit of the beneficiaries. The trust is governed by the terms under which it was created. In most jurisdictions, this requires a contractual trust agreement or deed. It is possible for a single individual to assume the role of more than one of these parties, and for multiple individuals to share a single role. For example, in a living trust it is common for the grantor to be both a trustee and a lifetime beneficiary while naming other contingent beneficiaries.Trusts have existed since Roman times and have become one of the most important innovations in property law. Trust law has evolved through court rulings differently in different states, so statements in this article are generalizations; understanding the jurisdiction-specific case law involved is tricky. Some U.S. states are adapting the Uniform Trust Code to codify and harmonize their trust laws, but state-specific variations still remain.

An owner placing property into trust turns over part of his or her bundle of rights to the trustee, separating the property's legal ownership and control from its equitable ownership and benefits. This may be done for tax reasons or to control the property and its benefits if the settlor is absent, incapacitated, or deceased. Testamentary trusts may be created in wills, defining how money and property will be handled for children or other beneficiaries.

While the trustee is given legal title to the trust property, in accepting the property title, the trustee owes a number of fiduciary duties to the beneficiaries. The primary duties owed include the duty of loyalty, the duty of prudence, the duty of impartiality. A trustee may be held to a very high standard of care in their dealings, in order to enforce their behavior. To ensure beneficiaries receive their due, trustees are subject to a number of ancillary duties in support of the primary duties, including a duties of openness and transparency; duties of recordkeeping, accounting, and disclosure. In addition, a trustee has a duty to know, understand, and abide by the terms of the trust and relevant law. The trustee may be compensated and have expenses reimbursed, but otherwise must turn over all profits from the trust properties.

There are strong restrictions regarding a trustee with conflict of interests. Courts can reverse a trustee's actions, order profits returned, and impose other sanctions if they finds a trustee has failed in any of their duties. Such a failure is termed a breach of trust and can leave a neglectful or dishonest trustee with severe liabilities for their failures. It is highly advisable for both settlors and trustees to seek qualified legal counsel prior to entering into a trust agreement.

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