Tentative Trust Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Tentative Trust, written in plain English, along with examples of how it is used.
What is Tentative Trust?
Its a bank account in the name of the depositor who acts as a trust for someone else. The account is closed once the depositor dies so that the misuse of the trust does not happen.
History and Meaning of Tentative Trust
A tentative trust is a type of bank account in which an individual, known as the depositor, places funds in a bank account and acts as a trustee for another individual or individuals. Essentially, the depositor holds the funds for the benefit of the intended beneficiary, but without officially setting up a legal trust. The account is closed upon the depositor's death to prevent any potential misuse of the funds.
Tentative trusts generally come into play in situations where the depositor is holding funds for a minor or incapacitated person who cannot manage the funds themselves. By setting up a tentative trust, the depositor is able to ensure that the funds are safely held until the intended recipient is able to manage the funds on their own.
Examples of Tentative Trust
Here are a few examples of how a tentative trust might be used:
- A grandparent opens up a bank account in their own name and deposits funds that they intend to give to their grandchild when they turn 18. Until the child reaches that age, the grandparent acts as a trustee for the funds.
- A parent opens a bank account in their own name and deposits funds that will be used to pay for their child's college education. Until the child is ready to attend college, the parent acts as a trustee for the funds.
- An individual sets up a tentative trust for a friend who is going through a difficult time and needs help managing their finances while they get back on their feet. The individual opens a bank account in their own name and acts as a trustee for the friend's funds.
- A trustee is named in a will to manage a portion of the deceased's assets for the benefit of a minor or incapacitated person. The trustee sets up a tentative trust to ensure that the funds are held safely until the beneficiary can manage them on their own.
Legal Terms Similar to Tentative Trust
Here are a few related legal terms:
- Express Trust: A legally-binding trust that is set up by a its creator during their lifetime.
- Resulting Trust: A trust that is created by operation of law when property is transferred under circumstances that suggest it was intended to be held in trust.
- Constructive Trust: A trust that is imposed by a court of law to prevent one party from being unjustly enriched at the expense of another party.
- Trustee: The individual who is responsible for managing the funds held in trust for the benefit of the beneficiary.