Trust and agency

[2]
Trustees and agents both owe fiduciary duties. Differences between trust and agency are:

a) An agency relationship can be created without vesting any property in the agent, whereas
title to property under a trust must be vested in a trustee.

b) The agent himself does not have to be party to contracts. A trustee who makes a contract in
the administration of the trusts contracts as principal, whereas an agent creates a contract on
behalf of the principal, he himself is not a party to the contract with another party.

c) At common law the relationship of principal and agent terminates on the death of either. If a
trustee dies, however, the trust is not terminated. Instead, a new trustee is

appointed.

Agency Trust

Whereas title to property under a trust must be

An agency relationship can be created without
vested[1] in a trustee. A trust only exists if it holds
vesting any property in the agent,
property.

The agent himself does not have to be party to A trust is always the result of a contract with a
contracts. grantor.

A trustee who makes a contract in the

The agent is not the principal.[2] administration of the trusts contracts as if he was
the principal.

Whereas an agent creates a contract on behalf of the A trustee opens accounts as principal of the
principal, he himself is not a party to the contract with account which holds property under conditions of
another party. the indenture of the trust.

At common law the relationship of principal and agent If a trustee dies, however, the trust is not
terminates on the death of either. terminated. Instead, a new trustee is appointed.