Trust

Definition

• A trust is a fund that is set up similar to a will. The trust specifies how money or property will be disbursed, it lists the recipients or beneficiaries, and names one or more trustees to manage the assets. An irrevocable trust cannot be changed after the terms are finalized; a revocable trust has more room for how much can be transferred, but it is usually more expensive to maintain.

Synonyms
account, will, funds, grant, money

Related Terms and Acronyms

• Canada Education Savings Grant (CESG) — Acronym, Canada,
  • Program recently introduced by the federal government whereby it will invest, in the form of grants, along-side parents who save for their children's education through RESPs. The government will top up contributions made to an RESP by 20% up to a yearly maximum of $400 per beneficiary.
• Contingent Beneficiary — Definition,
  • A beneficiary who only receives his or her benefit when specific conditions have been met.
• Fiduciary — Definition,
  • An individual, company, or association that manages assets for another party. Fiduciaries include executors of wills and estates, trustees, receivers in bankruptcy, and those responsible for managing the finances of a minor.
• Fiduciary Duty — Definition,
  • A requirement that someone in a position of trust, such as a banker, real-estate agent, or title agent, must act in good faith and trust on behalf of a client.
• Informal Trust — Definition,
  • Also known as in-trust account or "bare" trust, this is an investment account registered in an adult's name in trust for a child. The account is used to save/invest funds for a child, and the funds must be reserved for and used by the beneficiary child.
• Irrevocable — Definition,
  • Unalterable.
• Irrevocable Beneficiary — Definition,
  • A life insurance or segregated fund beneficiary whose benefit cannot be revoked or modified in any way without his or her consent.
• Issuer — Definition,
  • A legal entity that develops, registers, and sells securities including stocks, bonds and derivatives.
• Life Insurance Trust (LIT) — Acronym,
  • A legal entity that is made the beneficiary of a life insurance policy, often arranged to evade taxation.
• Reconveyance — Definition,
  • The transfer of title to the borrower after a mortgage has been paid fully.
• Registered Education Savings Plan (RESP) — Acronym, Canada, Very Important,
  • An investment vehicle used for a child's post-secondary education.
  ➥ RESPs are offered by most financial institutions in Canada.
• Revocable Beneficiary — Definition,
  • A beneficiary whose benefit can be modified without his or her consent.
• Sprinkling Provision — Definition,
  • A provision that gives a trustee the authority to distribute life insurance death benefits as he or she sees fit, and to those who need the money the most.
• Survivorship — Definition,
  • The right of a person to secure ownership by reason of his/her outliving someone with whom s/he shared undivided interest in the land.
• Trust Account — Definition,
  • An account used by a law firm or real estate agent to handle earnest money, funds set aside for repairs and other money that the buyer and seller put up before closing.
• Trust Company — Definition,
  • A company that acts as a trustee (an entity that controls financial assets on the behalf of another).
• Trustee — Definition,
  • A person who holds and manages assets for the benefit of beneficiaries.