A legal entity created by a grantor for the benefit of designated beneficiaries under the laws of the state and the valid trust instrument. The trustee holds a fiduciary responsibility to manage the trust's corpus assets and income for the economic benefit of all of the beneficiaries. A confidence reposed in one person, who is termed trustee, for the benefit of another, who is called the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui que trust. State ex rel. Wirt v. Superior Court for Spokane County, 10 Wash.2d 362, 116 P.2d 752, 755.
Any arrangement whereby property is transferred with intention that it be administered by trustee for another's benefit. A fiduciary relationship in which one person is the holder of the title to property subject to an equitable obligation to keep or use the property for the benefit of another. Scotti's Drive In Restaurants, Inc. v. Mile High-Dart In Corp., Wyo., 526 P.2d 1193, 1195.
A trust can be created for any purpose which is not illegal, and which is not against public policy. Collins v. Lyon, Inc., 181 Va. 230, 24 S.E.2d 572, 579.
Essential elements of trust are designated beneficiary and trustee, fund sufficiently identified to enable title to pass to trustee, and actual delivery to trustee with intention of passing title. City Bank Farmers' Trust Co. v. Charity Organization Soc. of City of New York, 238 App.Div. 720, 265 N.Y.S. 267.
An association or organization of persons or corporations having the intention and power, or the tendency, to create a monopoly, control production, interfere with the free course of trade or transportation, or to fix and regulate the supply and the price of commodities.
In the history of economic development, the "trust" was originally a device by which several corporations engaged in the same general line of business might combine for their mutual advantage, in the direction of eliminating destructive competition, controlling the output of their commodity, and regulating and maintaining its price, but at the same time preserving their separate individual existence, and without any consolidation or merger. This device was the erection of a central committee or board, composed, perhaps, of the presidents or general managers of the different corporations, and the transfer to them of a majority of the stock in each of the corporations, to be held "in trust" for the several stockholders so assigning their holdings. These stockholders received in return "trust certificates" showing that they were entitled to receive the dividends on their assigned stock, though the voting power of it had passed to the trustees.
This last feature enabled the trustees or committee to elect all the directors of all the corporations, and through them the officers, and thereby to exercise an absolutely controlling influence over the policy and operations of each constituent company, to the ends and with the purposes above mentioned. Though the "trust," in this sense, is now seldom if ever resorted to as a form of corporate organization, having given place to the "holding corporation" and other devices, the word became current in statute laws as well as popular speech, to designate almost any form of combination of a monopolistic character or tendency.
Northern Securities Co. v. U. S., 193 U.S. 197, 24 S.Ct. 436, 48 L.Ed. 679; Mallinckrodt Chemical Works v. State of Missouri, 238 U.S. 41, 35 S.Ct. 671, 673, 59 L.Ed. 1192.
In a looser sense the term is applied to any combination of establishments in the same line of business for securing the same ends by holding the individual interests of each subservient to a common authority for the common interests of all. Mallinckrodt Chemical Works v. State of Missouri, 238 U.S. 41, 35 S.Ct. 671, 673, 59 L.Ed. 1192.
A trust, as the term is used in the Restatement, when not qualified by the word "charitable," "resulting" or "constructive," is a fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person, which arises as a result of a manifestation of an intention to create it. Restatement, Second, Trusts No. 2.
See also breach of trust
- complex trust
- constructive trust
- declaration (declaration of trust)
- deed (deed of trust)
- executory trust
- grantor trusts
- illusory trust
- indestructible trust
- investment trust
- involuntary trust
- life insurance trust
- life interest
- nominal trust
- nominee trust
- oral trust
- pension trust
- precatory trust
- purchase money resulting trust
- reciprocal trusts
- resulting trust
- revocable trust
- terms of trust
- unitrust
@ accumulation trust
Trust in which trustees are directed to accumulate income and gains from sales of trust assets for ultimate disposition when the trust is terminated. Many states have laws governing the time over which accumulations may be made.
See also trust.
+ accumulation trust
A trust in which the trustee is directed to accumulate income for a period of time before distribution
@ active trust
One which imposes upon the trustee the duty of taking active measures in the execution of the trust, as, where property is conveyed to trustees with directions to sell and distribute the proceeds among creditors of the grantor; distinguished from a "passive" or "dry" trust. In a "passive trust" the legal and equitable titles are merged in the beneficiaries and beneficial use is converted into legal ownership, while in an "active trust" the title remains in trustee for purpose of the trust. Johnson v. Thornton, 264 S.C. 252, 214 S.E.2d 124, 127.
@ alimony trust
Device used to secure obligation of husband to pay support or alimony for wife. Transfer by husband to trustee of property from which wife as beneficiary will be supported after divorce or separation.
@ annuity trust
An annuity trust is a trust from which the trustee is required to pay a sum certain annually to one or more individual beneficiaries for their respective lives or for a term of years, and thereafter either transfer the remainder to or for the use of a qualified charity or retain the remainder for such a use. The sum certain must not be less than 5% of the initial fair market value of the property transferred to the trust by the donor. A qualified annuity trust must comply with the basic statutory requirements of I.R.C. No. 664.
+ annuity trust
A form of trust calling for payment of a fixed amount of income regardless of the amount of principal. In re McQueen's Will, 65 N.Y.S.2d 201, 205.
See also trust (annuity trust)
@ blind trust
Device used to give management of one's investments to an outside person over whom the beneficiary has no control. For example, to avoid the possibility of disqualification a judge could utilize a blind trust with respect to his or her investments. Union Carbide Corp. v. U.S. Cutting Service, Inc., C.A.I11., 782 F.2d 710, 718.
@ bond trust
A trust, the res of which consists in bonds which yield interest income. Business trust.
@ bypass trust
Also known as a credit trust, credit shelter trust or exemption equivalent trust, it is an estate planning tool whereby a deceased spouse's estate passes to a trust rather than to the surviving spouse, thereby reducing the likelihood that the surviving spouse's subsequent estate will exceed the estate tax threshold. Typically, the surviving spouse is given a life estate in the trust.
@ cestui que trust
The person for whose benefit a trust is created or who is to enjoy the income or the avails of it.
+ cestui que trust
/setiy ka trast/
He who has a right to a beneficial interest in and out of an estate the legal title to which is vested in another. The person who possesses the equitable right to property and receives the rents, issues, and profits thereof; the legal estate of which is vested in a trustee. The beneficiary of a trust
@ charitable remainder trust
A trust which consists of assets which are paid over to the trust after the expiration of a life estate or intermediate estates and designated for charitable purposes.
@ charitable trusts
Trusts designed for the benefit of a class or the public generally. They are essentially different from private trusts in that the beneficiaries are uncertain. In general, such must be created for charitable, educational, religious or scientific purposes.
See public trust, below.
@ Clifford trust
Under this tax planning device, a transfer of income-producing property is made to a trust which provides that the income is either to be paid or accumulated for the benefit of a beneficiary other than the grantor for a period of more than ten years, at which time the trust is to terminate and the property reverts back to the grantor. This transfer is made at the cost of a gift tax and if the gift tax paid is less than the income tax which will be saved as the result of the shifting of the income from the high-bracket grantor to the low-bracket beneficiary, the technique has merit from a tax point of view. Helvering v. Clifford, 309 U.S. 331, 60 S.Ct. 554, 84 L.Ed. 788; I.R.C. No.No. 671-S78.
The Tax Reform Act of 1986 changed the laws with respect to the Clifford trust and for transfers made after March 1, 1986, the trust is subject to taxation at the grantor's rate, which effectively eliminates the benefits of the Clifford trust.
+ Clifford trust
A trust established for a period of at least 10 years and one day whereby title to income producing assets is transferred and then reclaimed when the trust expires. The objective of a Clifford trust was to shift income from parents in a high income tax bracket to children in a lower bracket. The Tax Reform Act of 1986 repealed the Clifford trust rules for transfers made after March 1, 1986 and the income of the trust is taxed at the grantor's rate. For Clifford trusts established prior to March 2, 1986, income is taxed at the grantor's rate only if the child is under the age of 14.
See also kiddie tax
@ community trust
An agency organized for the permanent administration of funds placed in trust for public health, educational and charitable purposes.
@ complete voluntary trust
One completely created, the subject-matter being designated, the trustee and beneficiary being named, and the limitations and trusts being fully and perfectly declared.
@ complex trust
A complex trust is any trust other than a simple trust. One in which the trustees have discretion as to whether to distribute and discretion as to amounts distributed. Such trusts are governed for tax purposes by I.R.C. No.No. 661-663.
+ complex trust
A trust with elaborate provisions as distinguished from a simple trust. May refer to trust in which trustees have complete discretion as to accumulating or distributing trust income, i.e. trustee need not distribute income annually, or make distributions other than from income. Hay v. U. S., D.C.Tex., 263 F.Supp. 813.
See also trust
@ constructive trust
A trust raised by construction of law, or arising by operation of law, as distinguished from an express trust. Wherever the circumstances of a transaction are such that the person who takes the legal estate in property cannot also enjoy the beneficial interest without necessarily violating some established principle of equity, the court will immediately raise a constructive trust, and fasten it upon the conscience of the legal owner, so as to convert him into a trustee for the parties who in equity are entitled to the beneficial enjoyment.
Constructive trusts do not arise by agreement or from intention, but by operation of law, and fraud, active or constructive, is their essential element. Actual fraud is not necessary, but such a trust will arise whenever circumstances under which property was acquired made it inequitable that it should be retained by him who holds the legal title. Constructive trusts have been said to arise through the application of the doctrine of equitable estoppel, or under the broad doctrine that equity regards and treats as done what in good conscience ought to be done, and such trusts are also known as "trusts ex maleficio" or "ex delicto" or "involuntary trusts" and their forms and varieties are practically without limit, being raised by courts of equity whenever it becomes necessary to prevent a failure of justice.
See also involuntary trust
- trust ex maleficio, below.
+ constructive trust
Trust created by operation of law against one who by actual or constructive fraud, by duress or by abuse of confidence, or by commission of wrong, or by any form of unconscionable conduct, or other questionable means, has obtained or holds legal right to property which he should not, in equity and good conscience, hold and enjoy. Davis v. Howard, 19 Or.App. 310, 527 P.2d 422, 424.
A constructive trust is a relationship with respect to property subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that his acquisition or retention of the property is wrongful and that he would be unjustly enriched if he were permitted to retain the property. Restatement, Second, Trusts No. l(e)
@ contingent trust
An express trust depending for its operation upon a future event.
@ creation of trust
A trust may be created by:
(a) a declaration by the owner of property that he holds it as trustee for another person; or
(b) a transfer inter vivos by the owner of property to another person as trustee for the transferor or for a third person; or
(c) a transfer by will by the owner of property to another person as trustee for a third person; or
(d) an appointment by one person having a power of appointment to another person as trustee for the donee of the power or for a third person; or
(e) a promise by one person to another person whose rights thereunder are to be held in trust for a third person.
Restatement, Second, Trusts No. 17.
@ credit trust
See bypass trust.
- declaration of trust
- deed of trust/trust deed
@ directory trust
One which is not completely and finally settled by the instrument creating it, but only defined in its general purpose and to be carried into detail according to later specific directions.
+ directory trust
Where, by the terms of a trust, the fund is directed to be vested in a particular manner till the period arrives at which it is to be appropriated, this is called a "directory trust." It is distinguished from a discretionary trust, in which the trustee has a discretion as to the management of the fund
@ direct trust
An express trust, as distinguished from a constructive trust or implied trust.
See express trust below.
@ discretionary trust
Trust in which trustees have discretion as to types of investment and also as to whether and when distributions may be made to beneficiaries. Trusts under which the trustee or another party has the right to accumulate (rather than pay out) the income for each year. Depending on the terms of the trust instrument, such income may be accumulated for future distributions to the income beneficiaries or added to corpus for the benefit of the remainderperson.
@ dry trust
One which merely vests the legal title in the trustee, and does not require the performance of any active duty on his part to carry out the trust.
+ dry trust
A passive trust; one which requires no action on the part of the trustee beyond turning over money or property to the cestui que trust
@ educational trusts
Trusts for the founding, endowing, and supporting schools for the advancement of all useful branches of learning, which are not strictly private.
@ equipment trust
Financing method commonly used by railroads in which the equipment's title is transferred to trustees as security for the financing.
+ equipment trust
Financing device commonly used by railroads by which equipment is purchased from the manufacturer by a trustee who provides a substantial portion of the purchase price, the railroad providing the balance. The trustee then leases the equipment to the railroad which pays a rental fee consisting of interest, amortization for serial retirement and trustee's fee
@ estate trust
An estate trust is a trust, for all or part of the income of which is to be accumulated during the surviving spouse's life and added to corpus, with the accumulated income and corpus being paid to the estate of the surviving spouse at death. This type of trust is commonly used to qualify property for the marital deduction.
@ executed trust
A trust of which the scheme has in the outset been completely declared. A trust in which the estates and interest in the subject-matter of the trust are completely limited and defined by the instrument creating the trust, and require no further instruments to complete them.
@ executory trust
One which requires the execution of some further instrument, or the doing of some further act, on the part of the creator of the trust or of the trustee, towards its complete creation or full effect.
+ executory trust
Under this type of trust a further conveyance or settlement is to be made by the trustee. The test as to whether a trust is an "executory trust" is to determine whether settlor has acted as his own conveyancer and defines precisely the settlement to be made, and, if he has, the word "heirs" is one of limitation, and if he has not, the trust is executory, and the word "heirs" is a word of purchase, and the persons coming within such definition have an interest in the property. Sutliff v. Aydelott, 373 111. 633, 27 N.E.2d 529, 532
@ express active trust
Where will confers upon executor authority to generally manage property of estate and pay over net income to devisees or legatees, such authority creates an "express active trust".
@ express private passive trust
Such exists where land is conveyed to or held by one person in trust for another, without any power being expressly or impliedly given trustee to take actual possession of land or exercise acts of ownership over it, except by beneficiary's direction.
@ express trust
A direct trust. A trust created or declared in express terms, and usually in writing, as distinguished from one inferred by the law from the conduct or dealings of the parties. A trust directly created for specific purposes in contrast to a constructive or resulting trust which arises by implication of law or the demands of equity. Trusts which are created by the direct and positive acts of the parties, by some writing, or deed, or will, or by words expressly or impliedly evincing an intention to create a trust. Concannon v. Concannon, 116 R.I. 323, 356 A.2d 487, 491.
@ fixed trust
A non-discretionary trust in which the trustee may not exercise his own judgment.
@ foreign situs trust
A trust which owes its existence to foreign law. It is treated for tax purposes as a non-resident alien individual.
@ foreign trust
A trust created and administered under foreign law.
@ grantor trust
A trust in which the grantor transfers or conveys property in trust for his own benefit alone or for himself and another.
@ honorary trust
Trust for specific non-charitable purposes where there is no definite ascertainable beneficiary and hence unenforceable in the absence of statute. Illusory trust. A trust arrangement which takes the form of a trust, but because of powers retained in the settlor has no real substance and in reality is not a completed trust. In re Herron's Estate, Fla.App., 237 So.2d 563, 566.
@ imperfect trust
An executory trust (q.v.);
See also executed trust, above.
@ implied trust
trust raised or created by implication of law; a trust implied or presumed from circumstances.
Constructive and resulting trusts are implied trusts because they arise by implication of law or by demands of equity. Such arise by operation of law when the circumstances of a transaction are such that the court finds it inequitable for the legal owner to enjoy the beneficial interest. Price v. State, 79 Ill.App.3d 143, 34 Ill.Dec. 690, 398 N.E.2d 365, 370.
@ indestructible trust
A trust which may not be terminated or revoked.
+ indestructible trust
A trust which, inter alia, does not permit the invasion of principal by the trustees but which provides for income to A for life, with remainder to A's son's issue and for failure to A's daughter or issue. Application of Renn, 177 Misc. 95, 29 N.Y.S.2d 410, 412
@ instrumental trust
See ministerial trusts, below.
- insurance trust
@ inter vivos trust
Trust created by an instrument which becomes operative during the settlor's lifetime as contrasted with a testamentary trust which takes effect on the death of the settlor. A living trust (q.v.).
+ inter vivos trust
Trust created during lifetime of settlor and to become effective in his lifetime as contrasted with a testamentary trust which takes effect at death of settlor or testator.
See also trust
@ involuntary trust
Involuntary or "constructive" trusts embrace all those instances in which a trust is raised by the doctrines of equity, for the purpose of working out justice in the most efficient manner, when there is no intention of the parties to create a trust relation. This class of trusts may usually be referred to fraud, either actual or constructive, as an essential element.
+ involuntary trust
An implied trust which arises because the law imposes trust-like consequences on certain transactions where, for example, an agent breaches his fiduciary duty and buys property in his own name which rightfully should have been purchased for the benefit of his principal (constructive trust) or A supplies the funds for purchase of property by B with the understanding that A will own it but title will be taken in the name of B (resulting trust)
@ irrevocable trust.
Trust which may not be revoked after its creation as in the case of a deposit of money by one in the name of another as trustee for the benefit of a third person (beneficiary).
@ limited trust
Trust created for a limited period of time in contrast to a perpetual trust. Liquidation trust. Trust created for purpose of terminating a business or other undertaking and for distributing the res.
@ living trust
An inter vivos trust created and operative during the lifetime of the settlor and commonly for benefit or support of another person.
+ living trust
Trust which is operative during life of settlor; an active or inter vivos trust
@ marital deduction trust
A testamentary trust created to take full advantage of the marital deduction (q.v.) provisions of the Int.Rev.Code.
+ marital deduction trust
In estate planning, a device in the form of a trust utilized to gain the maximum benefit of the marital deduction by dividing the property in half. Commonly, one half of the property is transferred to the marital deduction trust and the other half is disposed of in a trust or like arrangement with a view towards having it escape taxation in the estate of the surviving spouse. As a result of a change in the law with respect to the estate of decedents dying after 1981, the marital deduction trust is generally not used. The law provides that there is no monetary ceiling on the estate tax marital deduction for decedents dying after 1981
@ Massachusetts or business trusts
@ business trusts
@ ministerial trusts
@ instrumental trusts
(Also called "ministerial trusts/instrumental trusts.")
Those which demand no further exercise of reason or understanding than every intelligent agent must necessarily employ; as to convey an estate. They are a species of special trusts, distinguished from discretionary trusts, which necessarily require much exercise of the understanding.
@ mixed trust
Trusts established to benefit both private individuals and charities. Green v. Austin, 222 Ga. 409, 150 S.E.2d 346.
@ naked trust
A dry or passive trust; one which requires no action on the part of the trustee, beyond turning over money or property to the cestui que trust.
@ nominee trust
An arrangement for holding title to real property under which one or more persons or corporations, pursuant to a written declaration of trust, declare that they will hold any property that they acquire as trustees for the benefit of one or more undisclosed beneficiaries.
+ nominee trust
An arrangement for holding title to real property under which one or more persons or corporations, pursuant to a written declaration of trust, declare that they will hold any property that they acquire as trustees for the benefit of one or more undisclosed beneficiaries
@ non-discretionary trust
A fixed trust under which the trustees may exercise no judgment or discretion at least as to distributions.
@ passive trust
A trust as to which the trustee has no active duty to perform.
"Passive trust," which equity court may terminate before it ends by its terms, is one in which the trustee does not have responsibilities or discretionary duties to perform. Nickson v. Filtrol Corp., Del.Ch., 262 A.2d 267, 271.
@ perpetual trust
A trust which is to continue as long as the need for it continues as for the lifetime of a beneficiary or the term of a particular charity.
@ personal trust
Trusts created by and for individuals and their families in contrast to business or charitable trusts.
@ pour-over trust
A provision in a will in which the testator leaves the residue of his estate to a trustee of a living trust for purpose of that pour-over trust.
- trust
@ power of appointment trust
Type of trust used to qualify property for the marital deduction. Property is left in trust for a surviving spouse. The trustee is required to distribute income to the spouse for life and the spouse is given an unqualified power to appoint the property to herself or to her estate.
@ precatory trust
Where words employed in a will or other instrument do not amount to a positive command or to a distinct testamentary disposition, but are terms of entreaty, request, recommendation, or expectation, they are termed "precatory words," and from such words the law will raise a trust, called a "precatory trust," to carry out the wishes of the testator or grantor.
+ precatory trust
A trust created by certain words, which are more like words of entreaty and permission than of command or certainty. Examples of such words, which the courts have held sufficient to constitute a trust, are "wish and request," "have fullest confidence," "heartily beseech," and the like.
See trust
@ private trust
One established or created for the benefit of a certain designated individual or individuals, or a known person or class of persons, clearly identified or capable of identification by the terms of the instrument creating the trust, as distinguished from trusts for public institutions or charitable uses.
@ public trust
One constituted for the benefit either of the public at large or of some considerable portion of it answering a particular description; public trusts and charitable trusts may be considered in general as synonymous expressions.
See also charitable trusts (charitable trust)
- trust
@ real estate investment trust
(REIT). Type of tax shelter wherein investors purchase certificates of ownership in trust which invests such funds in real estate and then distributes profits to investors.
+ real estate investment trust
Financial device in which investors purchase shares in a trust the res of which is invested in real estate ventures. A company that invests in and manages a portfolio of real estate with the majority of its income distributed to the shareholders. A closed-end mutual fund that invests in real estate or mortgages.
See also trust
@ reciprocal trust
Trust which one person creates for the benefit of another who in turn creates a trust for the benefit of the first party.
@ resulting trust
One that arises by implication of law, or by the operation and construction of equity, and which is established as consonant to the presumed intention of the parties as gathered from the nature of the transaction. It arises where the legal estate in property is disposed of, conveyed, or transferred, but the intent appears or is inferred from the terms of the disposition, or from the accompanying facts and circumstances, that the beneficial interest is not to go or be enjoyed with the legal title.
+ resulting trust
Trust implied in law from intentions of parties to a given transaction. Diel v. Beekman, 1 Wash.App. 874, 465 P.2d 212, 214.
One in which a party, through no actual or constructive fraud, becomes invested with legal title, but holds that title for the benefit of another, although without expressed intent to do so, because of a presumption of such intent arising by operation of law. First Nat. Bank of Denver v. Harry W. Rabb Foundation, 29 Colo.App. 34, 479 P.2d 986, 988, 989.
A "resulting trust" arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that person taking or holding the property should have the beneficial interest therein, unless inference is rebutted or the beneficial interest is otherwise effectively disposed of. Lifemark Corp. v. Merritt, Tex.App. 14 Dist, 655 S.W.2d 310, 316. Restatement, Second, Trusts, No. 404
@ revocable trust
A trust in which the settlor reserves the right to revoke.
+ revocable trust
A trust in which the settlor reserves the right to revoke. Such provision may have tax implications depending upon the time following its creation within which the settlor may revoke
@ savings bank trust
A Totten trust (q.v.).
@ secret trusts
Where a testator gives property to a person, on a verbal promise by the legatee or devisee that he will hold it in trust for another person.
@ shifting trust
An express trust which is so settled that it may operate in favor of beneficiaries additional to, or substituted for, those first named, upon specified contingencies.
@ short term trust
Trust which by its terms is to be administered for a short period of time and then terminated.
@ simple trust
A simple trust corresponds with the ancient use, and arises where property is simply vested in one person for the use of another, and the nature of the trust, not being qualified by the settlor, is left to the construction of law. A simple trust is a trust which provides that all of its income is required to be distributed currently, even if it is not in fact distributed, does not provide that any amounts are to be paid, permanently set aside, or used for charitable purposes; and does not distribute any amount other than current income.
Simple trusts are those that are not complex trusts. Such trusts may not have a charitable beneficiary, accumulate income, nor distribute corpus.
@ special trust
One in which a trustee is interposed for the execution of some purpose particularly pointed out, and is not, as in case of a simple trust, a mere passive depositary of the estate, but is required to exert himself actively in the execution of the settlor's intention; as, where a conveyance is made to trustees upon trust to reconvey, or to sell for the payment of debts.
Special trusts have been divided into
(1) ministerial trusts (or instrumental trusts) and
(2) discretionary trusts. The former, such as demand no further exercise of reason or understanding than every intelligent agent must necessarily employ; the latter, such as cannot be duly administered without the application of a certain degree of prudence and judgment. Spendthrift trust.
@ split-interest trust
Type of charitable trust commonly consisting of a life estate to an individual and a remainder to a charity. The Tax Reform Act of 1969 has placed restrictions on this type of trust.
@ sprinkling trust
When a trustee has the discretion to either distribute or accumulate the entity accounting income of the trust and to distribute it among the trust's income beneficiaries in varying magnitudes, a sprinkling trust exists. The trustee can "sprinkle" the income of the trust.
@ support trust
A trust in which the trustee has the power to pay the beneficiary only so much of the trust income as is necessary for the beneficiary's support, education and maintenance.
See also spendthrift trust, above
@ tentative trust
See Totten trust
@ testamentary trust
Trust created within a will and executed with the formalities required of a will in contrast to an inter vivos trust which is created by the grantor during his lifetime. A trust which does not take effect until the death of the settlor. Nearly all states have adopted the Uniform Testamentary Additions to Trust Act
+ testamentary trust
A trust created by a will which takes effect only upon the testator's death. The trust must satisfy requirements of both a valid trust and a valid will.
See also trust
@ Totten trust
Device used to pass property in bank account after depositor's death to designated person through vehicle of trust rather than through process of probate. Reidy v. Almich, 4 Ariz.App. 144, 418 P.2d 390, 393.
It is a tentative trust revocable at will until the depositor dies or completes the gift in his lifetime by some unequivocal act or declaration such as delivery of the passbook or notice to the beneficiary. If the depositor dies before the beneficiary without revocation or some decisive act or declaration of disaffirmance the presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor
See also trust
- tentative trust
@ transgressive trust
A name sometimes applied to a trust which transgresses or violates the rule against perpetuities
@ trust allotments
Allotments to Indians, in which a certificate or trust patent is issued declaring that the United States will hold the land for a designated period in trust for the allottee. U. S. v. Bowling, 256 U.S. 484, 41 S.Ct. 561, 562, 65 L.Ed. 1054
@ trust certificate
An obligation issued to finance railroad equipment and by which title to the equipment is held by trustees as security for repayment of the money invested
@ trust company
A corporation formed for the purpose of taking, executing, and administering all such trusts as may be lawfully committed to it, and acting as testamentary trustee, executor, guardian, etc. To these functions are sometimes (but not necessarily) added the business of acting as fiscal agent for corporations, attending to the registration and transfer of their stock and bonds, serving as trustee for their bond or mortgage creditors, engaging in fiduciary investment and estate planning functions, and transacting a general banking and loan business. A bank which is authorized to serve in fiduciary capacity as executor, administrator, etc. Such companies are commonly associated or combined with commercial banks
@ trust deed
The document by which one creates a trust. An indenture by which property is transferred to a trust. May also include a deed from the trustees. In some states, a mortgage deed. A species of mortgage given to a trustee for the purpose of securing a numerous class of creditors, as the bondholders of a railroad corporation, with power to foreclose and sell on failure of the payment of their bonds, notes, or other claims.
In some of the states, a trust deed or deed of trust is a security resembling a mortgage, being a conveyance of lands to trustees to secure the payment of a debt, with a power of sale upon default, and upon a trustee to apply the net proceeds to paying the debt and to turn over the surplus to the grantor. A trust deed on real estate as security for a bond issue is, in effect, a mortgage on property executed by the mortgagor to a third person as trustee to hold as security for the mortgage debt as evidenced by the bonds, for the benefit of the purchasers of the bonds as lenders.
See also deed (deed of trust)
@ trust deposit
Where money or property is deposited to be kept intact and not commingled with other funds or property of bank and is to be returned in kind to depositor or devoted to particular purpose or requirement of depositor or payment of particular debts or obligations of depositor. Also called special deposit.
See also deposit
@ trust estate
This term may mean either the estate of the trustee,-that is, the legal title,-or the estate of the beneficiary, or the corpus of the property which is the subject of the trust
@ trust ex delicto
See trust ex maleficio
@ trust ex maleficio
Where actual fraud is practiced in acquiring legal title, the arising trust is referred to as a "trust ex maleficio." Andres v. Andres, 1 Ark.App. 75, 613 S.W.2d 404, 407.
A "constructive trust," otherwise known as "trust ex maleficio," a "trust ex delicto," a "trust de son tort," an "involuntary trust" or an "implied trust" is a trust by operation of law which arises against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of a wrong or by any form of unconscionable conduct, artifice, concealment or questionable means and against good conscience, either has obtained or holds right to property which he ought not in equity and good conscience hold and enjoy. Briggs v. Richardson, App., 288 S.C. 537, 343 S.E.2d 653, 654.
See also constructive trust, above
@ trust de son tort
See trust ex maleficio
@ trust fund
A fund held by a trustee for the specific purposes of the trust; in a more general sense, a fund which, legally or equitably, is subject to be devoted to a particular purpose and cannot or should not be diverted therefrom. In this sense it is often said that the assets of a corporation are a "trust fund" for the payment of its debts.
+ trust fund
Money or property set aside as a trust for the benefit of another and held by a trustee. The majority of states have adopted the Uniform Common Trust Fund Act.
- trust
- trust fund doctrine)
@ trust fund doctrine
In substance, where corporation transfers all its assets with a view to going out of business and nothing is left with which to pay debts, transferee is charged with notice of the circumstances of the transaction, and takes the assets subject to an equitable lien for the unpaid debts of the transferring company; the property of a corporation being a fund subject to be first applied to the payment of debts. Meikle v. Export Lumber Co., C.C.A.Or., 67 F.2d 301, 304.
Under such doctrine, if insolvent corporation's assets are distributed among its stockholders before its debts are paid, each stockholder is liable to creditors for full amount received by him. Scott v. Commissioner of Internal Revenue, C.C.A.8, 117 F.2d 36, 39.
- trust fund
@ trust in invitum
A constructive trust imposed by equity, contrary to the trustee's intention and will, upon property in his hands
- trust legacy (legacy)
@ unitrust
A unitrust is a trust from which the trustee is required, at least annually, to pay a fixed percentage which is not less than five percent of the net fair market value of the trust assets, valued annually, to one or more beneficiaries, at least one of which is not a charity, for life or for a term of years, with an irrevocable remainder interest to be held for the benefit of, or paid over to, charity. A qualified unitrust must comply with the basic statutory requirements of I.R.C. No. 664.
+ unitrust
A trust from which a fixed percentage of the net fair market value of the trust's assets, valued annually, is paid each year to the beneficiary.
See also trust
@ vertical trust
In antitrust law, a combination which gathers together under a single ownership a number of businesses or plants engaged in successive stages of production or marketing.
@ voluntary trust
An obligation arising out of a personal confidence reposed in, and voluntarily accepted by, one for the benefit of another, as distinguished from an "involuntary" trust, which is created by operation of law. According to another use of the term, "voluntary" trusts are such as are made in favor of a volunteer, that is, a person who gives nothing in exchange for the trust, but receives it as a pure gift; and in this us"e the term is distinguished from "trusts for value," the latter being such as are in favor of purchasers, mortgagees, etc. A "voluntary trust" is an equitable gift, and in order to be enforceable by the beneficiaries must be complete. The difference between a "gift inter vivos" and a "voluntary trust" is that, in a gift, the thing itself with title passes to the donee, while, in a voluntary trust, the actual title passes to a cestui que trust while the legal title is retained by the settlor, to be held by him for the purposes of the trust or is by the settlor transferred to another to hold for the purposes of the trust.

Black's law dictionary. . 1990.

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