Trust Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Trust, written in plain English, along with examples of how it is used.
What is Trust?
It is a contract or an entity created , by giving the responsibility and legal title of property or any asset to trustees who would manage these. The assets are kept in custody of the trustees who are known for its reliability, integrity and well known chracteristic in the society and who would be totally faithful. The trusts are formed by the trustors or owners of the asset who may keep on adding to their trust.
History and Meaning of Trust
Trusts have been around since ancient times, with examples of their use being found in Roman and Common Law. However, the modern concept of a trust was first introduced in England in the 12th century. At the time, landowners would often leave the country to fight in wars, leaving their estates unmanaged. To address this, they would transfer the legal ownership of their land to a trusted person who would manage it in their absence. This type of arrangement would later become known as a "use" and, over time, evolved into the trusts that we know today.
In modern times, trusts are commonly used for estate planning, asset protection, and philanthropy. Trusts can also be used to manage and hold assets for minors, individuals with special needs, and those who are unable to manage their own affairs.
Examples of Trust
A wealthy individual sets up a trust to hold their estate and assets, with a trustee appointed to manage and distribute the assets according to the trust's terms.
A parent creates a trust for their minor child, with the funds to be distributed for the child's education and other expenses as needed.
A charity creates a trust to hold donations and assets, with the income from the trust used to fund their programs and services.
Legal Terms Similar to Trust
Fiduciary - a person or entity with a legal obligation to act in the best interests of another party.
Estate Planning - the process of arranging one's assets and affairs to ensure they are managed and distributed according to their wishes after their death.
Probate - the legal process of administering a deceased person's estate, including the distribution of assets and payment of debts.