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question.jpgIn Trusts and Estates

What is merger?

Merger is where the equitable title and legal title all end up being held by one person. When this happens, the trust is automatically terminated, because the very essence of a trust is that no single person holds all equitable and legal title. For example, assume you create a trust where your brother is the trustee in charge of distributing funds from a bank account to your son. Thus, your brother has legal title in the bank account and your son has equitable title. If your son sold his equitable title to your brother, your brother now owns both the legal and equitable title which means that they merge, and your brother owns the bank account outright and the trust has ended.