Definition of "Trust"

Legal entity that provides for ownership of property by one person for the benefit of another. The trustee receives title to the property, but does not have the right to benefit personally from that property. The trustee has a legal obligation to manage the property and invest its assets solely for the beneficiary of trust. Since the trustee is required to manage the property and its assets in a prudent manner, if the trustee fails to perform in accordance with the PRUDENT MAN RULE the trustee becomes personally responsible for any lost funds or profits incurred by the trust. There are basically two types of trusts: LIVING TRUST (established during the life of the GRANTOR) and TESTAMENTARY TRUST. For example, a trust may be established by a parent to hold assets for the benefit of a child.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Policy designed to act as a supplement to Medicare. The supplementation is in the form of additional benefits to that provided by Medicare. The additional benefits are in the form of ...

Individual or entity who enters into a contract or other legal proceeding, such as a lawsuit. ...

Federal agency that researches injury and illness arising from workplace hazards and recommends standards for maximum exposures to hazardous substances. ...

Physician who conducts physicals of applicants for life and/or health insurance. This physician is selected by the insurance company at its expense. ...

Indemnification bond under which a stock certificate holder who loses the original certificate will be issued a duplicate. The indemnity bond guarantees that if the original stock ...

Stipulation that no claim will be paid until a loss exceeds a flat dollar amount or a given percentage of the amount of insurance in force. After the loss exceeds this dollar amount or ...

The term elevator collision insurance or elevator liability insurance is included in business liability insurance policies in order to cover potential damages suffered by the elevator or ...

Damaged insured property in receipt by the insurance company resulting from abandonment and salvage, subrogation, and reinsurance. ...

Part of an ocean marine policy that provides coverage of goods through all of the stages of a journey. Coverage begins when goods leave the warehouse of a shipper, and continues until they ...

Popular Insurance Questions