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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Trust Company


Synonyms:legal trustee, trust firm, trusted entity
Filed Under: estate-management, financial-banking, legal-contracts
Tags: banking, contract, legal
 

Definition of trust company

trust company
1. A company, often either a bank, law firm, or independent partnership that acts as a fiduciary, agent or trustee for an individual or business for the eventual transfer of assets to a beneficiary. The trust company does not have ownership over the assets in their trust, but is legally responsible on the assets in their management.

Related Terms and Acronyms:

  • fiduciary   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   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.
  • four pillars   Refers to the main types of financial institutions: banking, trust, insurance, and securities.
  • informal trust   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.
  • issuer   A legal entity that develops, registers, and sells securities including stocks, bonds and derivatives.
  • sprinkling provision   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.
  • trust   A fund established like a will, specifying how money or property will be disbursed, lists the recipients or beneficiaries and names one or more trustees to manage the assets. An irrevocable trust can't be changed after the terms are finalized; a revocable trust has more legroom in how much can be transferred, but is usually costlier to maintain.

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