Does a Trustee Own the Property? What You Need to Know

A trustee holds the legal title to property in a trust, but does not own it for their own benefit. The people who benefit from the property, the beneficiaries, hold what is called the beneficial (or equitable) interest. This split between legal ownership and beneficial ownership is the very heart of how a trust works, and it explains why a trustee cannot simply treat trust property as their own.

What is the difference between legal and beneficial ownership?

Legal ownership is whose name the asset is registered in, for a house, who appears on the title at the Land Registry. Beneficial ownership is who is actually entitled to enjoy the asset or its value. In a trust, the trustee has legal ownership, but holds it for the beneficiaries who have the beneficial interest. The two can sit with different people, which is exactly what happens in a trust.

So does the trustee own the property?

In a narrow, technical sense, yes, the trustee is the legal owner. But they own it on behalf of others, not for themselves. A trustee cannot sell the property and pocket the proceeds, live in it rent-free without authority, or use it for personal gain. Everything they do must be for the benefit of the beneficiaries and within the terms of the trust.

What can a trustee actually do?

A trustee manages the trust property in line with the trust deed or will and the general law. That may include maintaining a property, letting it, selling it and reinvesting the proceeds, or allowing a beneficiary to live in it. Trustees have powers under the Trustee Act 2000, but those powers must always be exercised in the beneficiaries’ interests, with proper care, and without any conflict of interest.

What duties does a trustee owe?

Trustees owe strict duties. They must act honestly and impartially, keep the trust property separate from their own, keep proper accounts, and act with reasonable care and skill. If a trustee acts beyond their powers or for their own benefit, they can be held personally liable to the beneficiaries, this is known as a breach of trust.

What if you are a beneficiary with concerns?

If you are a beneficiary and worried that a trustee is mismanaging the property or acting in their own interests, you have rights. You can ask for information and accounts, and in serious cases the court can intervene and even remove a trustee. Disputes of this kind overlap with inheritance and trust disputes, and early advice helps.

Getting advice

Whether you are a trustee unsure of your obligations, or a beneficiary with concerns, we can help you understand where you stand. See our trusts service, or request a callback to speak with our team.