Short answers, pulled from the story.
A trust is a legal relationship in which a settlor transfers property to a trustee, who manages it solely for the benefit of a beneficiary. The trustee holds legal title to the assets while the beneficiary holds equitable ownership. The trustee owes fiduciary duties of loyalty, prudence, and impartiality to the beneficiary.
Personal trust law developed in England during the 12th and 13th centuries. Legal historians believe inter vivos trusts were first created for the benefit of Franciscan friars, who were forbidden to own property. The Statute of Uses of 1535, passed under King Henry VIII, attempted to abolish the device but lawyers found ways around it, giving rise to the modern trust.
A private express trust requires certainty of intention, certainty of subject matter, and certainty of objects, as established in Knight v Knight. Certainty of subject matter means the trust property must be clearly identified, as confirmed in Palmer v Simmonds. Certainty of objects means the beneficiaries must be identifiable, a standard addressed in McPhail v Doulton.
A trustee owes primary fiduciary duties of loyalty, prudence, and impartiality, supported by ancillary duties including openness, transparency, recordkeeping, regular accounting, and disclosure. Trustees must hand over all profits and may not speculate with trust assets without the written, clear permission of all adult beneficiaries. A court can remove a trustee who breaches these duties and order profits returned.
A living trust, also called an inter vivos trust, is created during the settlor's lifetime. A testamentary trust is established and funded through the terms of a deceased person's will and generally comes into existence at or after the settlor's death. Living trusts are increasingly used in the United States as a substitute for wills because they avoid probate and keep distribution terms private.
Most civil law jurisdictions do not include trusts in their domestic legal systems, partly due to tax avoidance concerns, but they recognize the concept in cross-border cases through the Hague Convention on the Law Applicable to Trusts and on their Recognition. France added a similar device called the fiducie, amended in 2009, which is a contractual relationship rather than a true trust. Curacao enacted trust law on the 1st of January 2012, restricted to trusts constituted by notarial instrument.