The law of trusts is based upon the concept of English law
that property rights can be split into:
A person who is the absolute owner of property has both the
legal and beneficial interest in it.
This means that the owner will show up as legal owner, e.g.
on a land register or on a company register, and will also enjoy
any benefit produced by the property.
The absolute owner may split the legal interest from the
beneficial enjoyment. This can be done by giving the legal
ownership to trustees and the beneficial interest to a named
beneficiary (or beneficiaries). Alternatively the owner can retain
the legal title and make himself a trustee.
Not all property held by trustees for the benefit of other
people is settled property. Examples of this are:
Scots Law has always had a unified system of law and equity and so never adopted the theory of legal and beneficial estates, with the result that Scots Law never recognised that the beneficiary could have real rights in trust property. This is probably the single most important difference between Scots Law and English Law in relation to trusts.
