In most common law systems, trust properties are those properties that are managed by one person, a group of people, or organizations for the benefit of another. A trust agreement is created when an individual enters into an agreement that stipulates that the secondary parties will be entrusted with some or all of the initiating party's property. The owner of the property most commonly is referred to as the settlor. Trustees are the individuals or individual with which the settlor initiates the agreement. The agreement typically stipulates that the trustees will manage the property in a manner that will be most beneficial to the settlor.
Trustees have a heavy responsibility due to the fact that their decisions concerning the property of the settlor can have a major impact on his or her financial well-being. The trustees hold legal title to the property entrusted to them at the time of the agreement, but the trustees are legally bound to facilitate the use of their legal entitlement in a manner that is consistent with the overall goal of benefiting the settlor. Due to the nature of trust property agreements, the legal title that trustees hold to the property is specified by the settlor, who retains an equitable amount of legal entitlement to the property.
Trust property comes in many different forms, and the varying nature of the forms of property requires differing methods of management. Real trust property is a form of property that is differentiated from other forms of trust property due to its immobility. Generally, real property is land – it is an immovable asset that is static but can undergo changes due to its connection with the natural environment. Personal trust property is distinct from real trust property due to the fact that this property is movable.
Any property that a settlor entrusts to a trustee or trustees is classified as trust property and typically will be managed in accordance with the differing characteristics of the various forms of property. Personal property is commonly referred to as chattel or personality. Intangible trust property is another asset that settlors may entrust to the trustees of their choice. This type of property has the unique characteristic of being immovable and unable to be felt, such as securities.