Unit 5 - part 2 Flashcards
What is trust?
A trust is a device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party.
Who is a trustor?
A person who creates the trust.
Who is a beneficiary?
A person who benefits from the trust.
Who is a trustee?
A party who holds legal title to the property and is entrusted with carrying out the trustor’s instructions regarding the purpose of the trust (fiduciary).
The trustee’s power and authority are limited by the terms of the trust agreement.
Who can be trustor, beneficiary and trustee?
Depending of type of trust and its purpose, the trustor, trastee and beneficiary can all be rather people or legal entities, such as corporation.
What types of trust exist?
- living and testamentary trust
2. land trust
What are living and testamentary trust?
The trust may be created by agreement during the property owner’s lifetime - a living trust.
Or, can be established by will after the owner’s death - a testamentary trust.
What is a land trust?
RE is the only asset of a land trust. As in all trusts, the property is conveyed to a trustee, and the beneficial interest belong to beneficiary. In the case of a land trust, the beneficiary is usually also the trustor. Beneficiary retains management and income. Continues for a definite term.
Land trust are frequently created for conservations of farmland, forests, coastal land, scenic vistas and wildlife habitats.
One of the distinguishing characteristics of a land trust is that the public record usually do not name the beneficiary.
