Difference Between a Trust & a License
Permission and control are two powerful legal rights. Outright ownership of a piece of property affords the owner complete control over the item. Certain legal distinctions can grant a person or entity some degree of permission or control over property. Trusts and licenses often involve questions of permission and control, but the two concepts are very different legal distinctions.
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Trust
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A trust is a legal entity that operates via a trustee. When property is placed in trust, it is held for the benefit of a third person, called a beneficiary. In a trust, title to property is split in two. The trustee holds legal title; he has some degree of permission and control over the items in the trust, but only to the extent specifically delineated in a trust agreement. The beneficiaries hold equitable title; they are entitled to the benefit of the property, such as the income and interest earned by the property. The trust document may specify the circumstances that a beneficiary can receive and have access to the property held in the trust.
License
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A license is the permission to do something on or to the property owned by another. Licenses can arise orally or in writing. Unlike a trust, the title to the property is not split and it remains with the original's owner; the owner can revoke the license if the licensee does some act inconsistent with the scope of the permission.
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Trust Uses
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Trusts are often used as an estate planning device. The creator of a trust, called the "grantor," can create a trust document that specifies how his heirs and beneficiaries receive their inheritance. A trust can be irrevocable, meaning that it cannot be easily modified or changed unless certain exceptions exist, or revocable. A revocable trust can be created during the lifetime of the grantor; it allows the grantor to retain full control and authority over his assets until he dies and can be useful if the grantor becomes unable to make his own decisions later in life because of some condition, injury or illness.
Uses of a License
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Licenses are very common. One of the most common licenses is a driver's license; the state issues licenses to drivers who meet certain requirements and have passed relevant driving tests to use cars and other automobiles on public roadways. Licenses can arise in a number of different ways. If a landowner has a surplus of fill dirt on his land, for example, he can contract with interested parties and grant the parties a license to remove the fill dirt according to the terms of the agreement.
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