{"id":13092,"date":"2025-04-09T16:52:32","date_gmt":"2025-04-09T21:52:32","guid":{"rendered":"https:\/\/legaltalktexas.hammerle.com\/?p=13092"},"modified":"2025-06-18T11:55:24","modified_gmt":"2025-06-18T16:55:24","slug":"how-property-is-owned-in-a-trust","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/wills-trusts\/how-property-is-owned-in-a-trust\/","title":{"rendered":"How Property is Owned in a Trust"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Does a trust beneficiary own the assets in his <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/wills-trusts\/different-types-of-trusts-in-estate-planning\/\"><span style=\"font-weight: 400;\">trust<\/span><\/a><span style=\"font-weight: 400;\">?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You may be surprised to find out that he does not. There are actually various types of ownership, or \u201ctitle,\u201d to property, and trusts have at least two.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Types of Property Ownership<\/span><\/h2>\n<h3><span style=\"font-weight: 400;\">Beneficial or Equitable Title\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">\u201cBeneficial title\u201d or \u201cequitable title,\u201d also called a \u201cbeneficial interest\u201d or \u201cequitable interest,\u201d carries with it the right of use or enjoyment of the property. A beneficiary under a trust has a beneficial interest in the trust property. That is, he has a right to the benefit of the property left in trust, including its economic advantages. However, he cannot deal with the property directly as the owner of legal title.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Legal Title<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">\u201cLegal title\u201d is the form of ownership that is often received through a <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/real-estate\/6-types-of-real-estate-deeds-to-know-about\/\"><span style=\"font-weight: 400;\">deed<\/span><\/a><span style=\"font-weight: 400;\"> or assignment.\u00a0 It grants the owner various rights, such as the right to control the property, the right to transfer it to another owner, or to encumber it with liens. It carries with it various obligations, such as maintenance and paying taxes. Legal title can also be subdivided, such as title to the surface of land versus title to the minerals underlying the land. Often, legal title carries with it the right to enjoy the property, but not in the case of a trust.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A trustee of a trust has legal title to the trust property. The trust property is actually transferred to her in her capacity as a trustee. But the trust document controls how the legal owner can use or dispose of the property. So, although a trustee has legal title to the property, she does not have a beneficial title.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Can Property Be Transferred to the Trust?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Sometimes property is transferred \u201cto the trust,\u201d and title is held in the name of the trust, without naming the trustee. Legally, that transfer is void. Any deed or assignment that names \u201cthe John Doe Trust\u201d as the transferee fails for lack of a legal transferee. A trust is just a contractual relationship between a trust-maker, a trustee, and a <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/probate\/beneficiary-in-waiting-rights-during-the-probate-process-can-be-complex\/\"><span style=\"font-weight: 400;\">beneficiary<\/span><\/a><span style=\"font-weight: 400;\">. The trust itself is a pile of paper; it is not a legal entity with the ability to own property. It is the trustee who must own the property held for the benefit of the beneficiary. So the trustee must be named as the transferee or transferor on any deed dealing with trust property.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">How to Avoid a Void Trust Transfer<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Luckily, the Texas legislature has enacted a law that saves many transfers of property from being void. <\/span><a href=\"https:\/\/statutes.capitol.texas.gov\/Docs\/PR\/htm\/PR.114.htm\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Section 114.087 of the Texas Property Code<\/span><\/a><span style=\"font-weight: 400;\"> says that if a deed transfers property to \u201cthe John Doe Trust\u201d instead of naming the trustee of the trust, then the trustee will be considered to be the named party in the deed. But although the law saves people from their own mistakes, it\u2019s better practice to make sure the assignment is correct in the first place; that is, to the trustee, not to the trust itself.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Let Hammerle Morris Help You With Your Trust<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There are a lot of pitfalls for the unwary when preparing a trust. <\/span><a href=\"https:\/\/hammerle.com\/our-team\/kendra-rey\/\"><span style=\"font-weight: 400;\">Kendra Rey<\/span><\/a><span style=\"font-weight: 400;\"> from Hammerle Morris can advise you on what trust may be right for you and the correct funding. Set a <\/span><a href=\"https:\/\/hammerle.com\/lewisville-attorney\/#form\"><span style=\"font-weight: 400;\">consultation<\/span><\/a><span style=\"font-weight: 400;\"> to discuss your estate planning today.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Kendra Rey dedicates her practice to representing clients in estate planning and probate. This blog contains general information only and does not constitute legal advice.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Does a trust beneficiary own the assets in his trust? You may be surprised to find out that he does not. There are actually various types of ownership, or \u201ctitle,\u201d to property, and trusts have at least two.\u00a0 Types of Property Ownership Beneficial or Equitable Title\u00a0 \u201cBeneficial title\u201d or \u201cequitable title,\u201d also called a \u201cbeneficial [&hellip;]<\/p>\n","protected":false},"author":38,"featured_media":13093,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[42],"tags":[],"class_list":{"0":"post-13092","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-wills-trusts"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Property is Owned in a Trust | Hammerle Morris Law Firm<\/title>\n<meta name=\"description\" content=\"Who owns trust property\u2014the trustee or the beneficiary? 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