Ownership of beneficial interest in trust: Participation in profits and losses; creditor of beneficial owner; personal property; evidence of interest; transferability; distributions.
1. Except as otherwise provided in the governing instrument, a beneficial owner participates in the profits and losses of a business trust in the proportion of his beneficial interest to the entire beneficial interest. A governing instrument may provide that the business trust, or the trustees on its behalf, hold beneficial ownership of income earned on securities owned by the business trust.
2. A creditor of a beneficial owner has no right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, property of the business trust.
3. A beneficial interest in a business trust is personal property regardless of the nature of the property of the business trust. Except as otherwise provided in the certificate of trust or the governing instrument, a beneficial owner has no interest in specific property of the business trust.
4. A beneficial interest in a business trust may be evidenced by the issuance of certificates of ownership or by other means set forth in the certificate of trust or the governing instrument.
5. Except as otherwise provided in the certificate of trust or the governing instrument, a beneficial interest in a business trust is freely transferable.
6. Except as otherwise provided in the certificate of trust or the governing instrument, if a beneficial owner becomes entitled to receive a distribution, he has the status of, and is entitled to all remedies available to, a creditor of the business trust with respect to the distribution. The governing instrument may provide for the establishment of record dates with respect to allocations and distributions by a business trust.
7. The fact of ownership of a beneficial interest in a business trust is determined, and the means of evidencing it are set forth, by the applicable provisions of the certificate of trust or the governing instrument.
Last modified: February 26, 2006