What Is a Residuary Beneficiary?

Trust beneficiaries, also known as "beneficiaries." Refers to the parties who enjoy the beneficiary rights of the trust. According to the concept of equity, the beneficiary has a more important position than the grantor of the property and is an essential element of the trust. In a private benefit trust, the beneficiary is usually the person granting the property or his relatives, but it can also be another identified party; in a public trust, the beneficiary is the public in a specific scope. According to the rules of equity, the beneficiaries have the right to claim the benefits of the trust, the right to supervise and control the trustee's proper management, based on the right of all beneficiaries to terminate the trust, and the right to expect the return of the remaining property when the trust is destroyed This is called the residual right. ^[1]

Trust beneficiary

Trust beneficiaries, also known as "beneficiaries." Refers to the parties who enjoy the beneficiary rights of the trust. According to the concept of equity, the beneficiary has a more important position than the grantor of the property and is an essential element of the trust. In a private benefit trust, the beneficiary is usually the person granting the property or his relatives, but it can also be another identified party; in a public trust, the beneficiary is the public in a specific scope. According to the rules of equity, the beneficiaries have the right to claim the benefits of the trust, the right to supervise and control the trustee's proper management, based on the right of all beneficiaries to terminate the trust, and the right to expect the return of the remaining property when the trust is destroyed This is called the residual right. ^[1]

Instead of issuing it by itself, it applies to a trust institution to run a "secured corporate bond trust". An enterprise should mortgage a certain property to the trust institution as collateral, and the trust institution should issue bonds to raise funds. The trust institution is, of course, the trustee, and the bondholder who subscribed for the bond is one of the beneficiaries because he has found a way out of the funds and can obtain the debt interest. It is also one of the beneficiaries for a company to obtain the lack of liquidity by issuing bonds. They are co-beneficiaries. Of course, an enterprise is both a beneficiary and a client. The beneficiaries in the trust relationship are all designated by the trustee when setting up the trust. The beneficiaries can participate in signing trust documents or not. The beneficiary may be explicitly specified in the document, but it is not specific. Such as

The beneficiary is a party to the trust relationship

There are no eligibility restrictions for beneficiaries, which are different from the principal and the trustee, whether natural persons or

The beneficiary is the person who enjoys the trust beneficial rights in the trust relationship. The rights of beneficiaries are mainly as follows:

(1) to enjoy the various rights enjoyed by the client;

(2) The right to transfer and inherit the beneficiary rights of the trust according to law;

(3) The right to use the beneficiary rights of the trust to settle the debts that cannot be repaid due;

(4) When the trust is terminated, the trust document does not stipulate the trust

Article 51 of the Trust Law stipulates: "After the establishment of a trust, the trustee may change the beneficiary or dispose of the beneficiary rights of the trust in one of the following circumstances: (1) the beneficiary has a major tort against the trustee; 2) The beneficiary has a major infringement on the other co-beneficiaries; (3) With the consent of the beneficiary; (4) Other circumstances stipulated in the trust document. There are items (1), (3), and (4) in the preceding paragraph. In one of the situations listed in item), the trustee may release the trust. " ^[2]

In the case of a non-trust act of a beneficiary, in a private benefit trust, the beneficiary enjoys the rights to the original and proceeds of the trust property, which has become an important element of the trust. Once the trust relationship is effectively established, once the beneficiary right is vested in the beneficiary, as a kind of property right attributable to the beneficiary, the general principles of taking, losing, and changing property rights apply. The death of the sole beneficiary will not affect the effectiveness of the trust. For reasons such as inheritance and transfer, the result is a change in the beneficiary.