Property that is held by one
party, the trustee, for the
benefit of another, the beneficiary.
The one who supplied the property or consideration for the trust is the settlor. Trust also encompasses any
relationship in which one acts as a fiduciary
or guardian for another.
A trust whereby the settlor places all financial interests under
the control of an independent trustee for a period of time, most often in order
to avoid the appearance of a conflict of interest.
constructive (involuntary) trust
A trust that is imposed by a court against one who
has acquired property by wrongful means, in order to prevent the holder of that
propertyÂ’s being unjustly enriched and for the benefit of the rightful owner.
No fiduciary relationship is created by this type of trust.
A trust in which the settlor has granted the trustee the
discretion to pay to the beneficiary as much of the income or principal as the
trustee sees fit. This is the type of trust most often used in estate planning.
express (direct) trust
A trust set up with an affirmative expression by the
settlor (usually in writing) of the purpose of the trust. This is an ordinary
trust as distinct from a resulting or constructive one.
fixed investment trust
See nondiscretionary trust.
generation skipping trust
A trust set up to transfer property to a beneficiary
more than one generation removed from the settlor, such as a grandchild.
In this type of trust, the settlor retains so much control over
the property in trust and/or its income that the settlor is responsible for
taxes on that property.
inter vivos trust
A trust created and takes effect during the lifetime of the
An intervivos trust that receives money from another trust or
other source or that distributes receipts to another trust.
. Trusts created by a will by use of precatory words such as Â“wishÂ”
or some other entreaty rather than specific direction. See also precatory
A trust brought about by law when the circumstances in which
property is transferred that suggest that it was not the intention of the
transferor to give beneficial interest in the property to the transferee.
Â A trust created by a will and that comes into Âexistence upon
the death of the grantor.
A bank account created by the depositor in trust for another. It
is often used to name a successor to an account without the need to write a
will. It is also fully revocable.
The combination of voting rights among a group of stockholders to
exert a higher degree of influence or control within the corporation, or to
bring about a specific result.Â