Trust Glossary, Definitions, and FAQs

 Amendments - Changes made, either by way of correction or addition.
 Beneficiary - The person for whose benefits a trust is created or
 the person whom the amount of an insurance policy or annuity is
 payable.  The person designated to have and hold the equitable
 interest in a trust estate.  In the case of a Pure Trust, the
 beneficiaries are the holders of Trust Certificate Units (TCU's).
 Business Trust - A common law contract arrangement whereby a legal
 entity is established similar in form to a corporation but taxed
 either as a corporation or as a trust depending on the laws of the
 particular jurisdiction in which the instrument is created, and in
 accordance with the terms and conditions of the agreement and the
 methods by which it is utilized.  Any trust which by operation of
 state or federal tax law can be taxed in the same manner as a
 corporation.  Often termed as "Massachusetts Trust", Unincorporated
 Business Organization, Business Trust Organization, Unit Trust, or
 Common-law Trust.  Similar to "Pure Trust".
 Commonly abused by tax resistors and promoters.  Not recommended.
 Capital - Principal or corpus or value of assets placed in trust. 
 Charter Trust - See "Pure Trust"
 Civil Law - The legal system prevailing in the European, Asiatic,
 Central America, and South America countries which inherited their
 legal systems from Rome; in practically all except the English -
 speaking countries.
 Clifford Trust - A short-term irrevocable trust which lasts at
 least 10 years.  When the trust ends, the principal is returned to
 the original owners.
 Common Law - That part of the law which has developed over time
 through court decisions and opinions rather than by state statue or
 other legislative process.  The legal system prevailing in the
 English - speaking countries; that is, the United States and the
 countries making up the British Empire and Commonwealth of
 Nations.  Originated in England.  Different from that of Roman
 civil law.  Compare Civil law.
 Common-Law Trust - See "Business Trust".
 Community Property - An undivided interest arising by operation
 of state statute, in real or personal assets owned during or
 acquired during marriage by the spouses.  Can be nullified by
 transfer from one spouse to the other.  Property in which a husband
 and wife have each an undivided one-half interest.
 Competent - Legally qualified; possessing adequate mental capacity.
 Complex Trust - Any trust in which the trustees have the discretion
 whether or not to distribute income, or a portion thereof, to a
 beneficiary or beneficiaries in any year.
 Contract - An agreement in which a party undertakes to do, or not
 to do a particular thing.  The essential elements of a written
 contract are (a) parties competent to contract, whose names
 appear in the writing; (b) the subject matter of the contract, or
 a clear statement of what is to be done or not done; (c) lawful
 and valid consideration, and if made up of mutual promises, then
 a clear and explicit statement of what each party promises to do
 or not do; and (d) agreement of the signed parties.
 Contract Law - See "Law of Contract".
 Contract And Declaration Of Trust Indenture - See "Trust" and
 Conveyance - The act by which title to property is transferred. 
 Usually an instrument in writing.
 Corporation - An artificial being created by law and endowed with
 certain rights, privileges, and duties of natural persons.
 Corpus - The body of assets or property belonging to an entity,
 such as a trust or estate.  The principal or capital of an estate,
 as distinguished from the income.
 Creator - A Creator in a document is the person who establishes a
 trust by conveying assets to it.  aka Grantor, Settlor or Trustor.
 Declaration of Trust - An acknowledgment, usually but not
 necessarily in writing, by one holding or taking title to property
 that he or she holds the property in the trust for the benefit of
 someone for or to the use of another.  See Trust Indenture.
 Deed - Written document by which the ownership of land is
 transferred from one person to another.
 Deed of Trust - Almost always is used as a protective device like a
 mortgage or used as a recorded document to notify and secure monies
 against real estate.  Could be used for some other secured right.
 Decedent - The person who has died.
 Descendant - One who is descended in a direct line from another,
 however remotely; the same as "issue".  Relatives.
 Devise - A gift of real property by will.  A person who receives
 such a gift is called a devisee.
 Discretionary Trust - A trust which entitles the beneficiary only
 to so much of the income or principal as the trustee in its
 uncontrolled discretion shall see fit to give the beneficiary.
 District / District of Columbia / D.C. - A location within the
 continental United States, that is NOT a State or within any State
 of the United States.  Designed by the originators and forefathers
 of the constitution as a separate place that cannot be controlled
 by any state.  A safe, independent, small, city-like community,
 that is the central place of national government of the United
 States of America as a whole.
 Dividend Trust Certificate Units - Trust Units similar to "Stock"
 that cannot be attached, given away, or taken away that are limited
 to income (not principal).  See similar "Equity Trust Certificate
 Domicile - The legal residence of a person or entity.  A person's
 domicile may or may not be the same as his or her residence at a
 given time.
 Dry Trust - Any type of trust without assets.  A shell.
 Equity - A system of legal principals, rules, and law which arose
 outside the common law which has power to enforce discovery, and
 administer trust, mortgages, and other fiduciary obligations,
 administers and adjusts common-law rights were rights where the
 courts of common law have no means, and supplies a specific and
 preservative remedy for common-law wrongs where courts of common
 law only give subsequent damages.  Its characteristic is
 flexibility and its aim is the administration of justice.
 Equity Trust Certificate Units - Trust Units similar to "Stock"
 that cannot be attached, given away, or taken away that are limited
 to principal (not income).  See similar "Dividend Trust Certificate
 Estate Tax - A tax imposed on a decedent's estate from effects of a
 will (or lack of a will).
 Executor - An individual or a trust institution (perhaps nominated
 in a will and) appointed by a court to carry out duties.
 Family Trust - A term loosely defined as any Trust that is to
 manage and protect assets for family members.
 Fee Simple - Absolute title.  The kind of ownership which enables
 the owner to manage and control property.
 Fiduciary - An individual or a trust institution, a person,
 persons, acting for the benefit of another party.
 Foreign Corporation - A corporation organized under the law of
 another state or country.
 Funded Insurance Trust - A trust with assets which could be an
 insurance policy and/or other kinds of property.
 Grantor - Deed: The person transferring his title to another
 (the Grantee) under a deed.  Trust: The same as Creator,
 Settlor, or Trustor.
 Homestead - On the simplest level, a document you file with the
 County Recorder, and when you do it, you gain a lot of protection
 for your home.  More specifically, if you file a declaration of
 homestead, then some of your equity in your home will be protected
 against forced sale by creditors.
 Income-shifting - Determine where to funnel income to control tax
 Incompetents - Persons not able or competent to perform duties.
 Insurance Trusts - A trust specifically designed for insurance.
 Inter Vivos Trust - Any trust which is established during life.
 Intestate - Without a will.
 Irrevocable Trust - Any trust in which the creator retains no
 power to revoke or cancel the trust agreement.
 Joint Tenancy - An undivided interest in property held by two or
 more persons, who all hold the same title and rights of possession,
 at the same time, jointly, and under which the survivor or
 survivors take the entire interest.
 Judgement Proof - A person without assets or concern of lawsuits.
 Land Trust - Commonly referred to as an Illinois Land Trust, for
 houses, property, or other real estate (or notes and mortgages
 secured by real estate).  Unique features for land ownership.
 Law of Contract - The basis upon which many contracts exist (as
 opposed to the Law of Statutes).  The right to contract was exposed
 and granted by the U. S. Constitution.
 Law of Statute - Laws based on a single State of the United
 States.  Usually binding in other states, but based upon state
 law.  Most attorneys assume contracts are based upon the local
 state law, unless stated otherwise within the contract.  Also, most
 attorneys will create contracts based upon their local state laws,
 because their license, training, and background is similarly based.
 Lawyer - "A licensed person practicing law instead of justice."
 Legal Ownership or Legal Title - An estate or interest in property
 which is enforceable in a court of law.
 Lien - A hold upon property until payment of a debt or duty.
 Life Estate - Only a benefit during the life of a person.
 Lis Pendens - "Suit pending"; notice of action.
 Living Revocable Trust, Living or "Inter Vivos" Trust - A trust
 created during the lifetime of the creator.
 Massachusetts Trust - See "Business Trust".
 Nevada Trust - A trust created based upon Nevada Law because of
 favorable laws regarding state taxes.
 Notary - A signature and seal by a Notary Public signifying that a
 specific person(s) has personally signed a document.  Sometimes
 also attesting that an oath was stated as well.
 Passive Trust - A trust regarding which the trustee has no active
 duties to perform, being merely a titleholder or holding entity.
 Perpetuity Law - Any limitation or condition which may take away or
 suspend the power of alienation for a period beyond life or lives
 in being and 21 years thereafter.
 Person - Either a human being, corporation, partnership, trust, or
 other entity, unless shown that only a human being is intended.
 Personal Property - All property other than real property.
 Power - Authority or right to do or to refrain from doing a
 particular act, such as a manager's banking power.
 Power of Attorney - A document, witnessed and acknowledged,
 authorizing the person named therein to act as attorney-in-fact for
 the person signing the document.  If the attorney-in-fact is
 authorized to act for his or her principal in all matters, he has a
 general power of attorney; if he or she has authority to do only
 specified things, he or she has a special power of attorney.  
 Prenuptial Agreements - Agreements made before marriage about what
 will result of each spouse's assets and belongings they owned
 before the marriage in case of a divorce. 
 Principal - In either a trust or a will, the real and personal
 property which initially makes up the corpus of the estate or which
 is subsequently transferred thereto from which income is produced;
 or in an agency relationship, the principal is the individual who
 authorized another to act on his or her behalf, which individual is
 also known as an agent.
 Private Trust - A trust created for the benefit of a designated
 beneficiary or designated beneficiaries, such as a trust for the
 benefit of the settlor's or the testator's spouse and children.
 Probate - Procedures which are followed under court direction and
 supervision to allocate property with (or without) a will.  The
 court system takes authority over the assets of the estate of an
 individual and determines validity, distribution, and appoints a
 legal representative to manage the affairs for a large fee.
 Probate Court - The court that has jurisdiction with respect to
 wills and intricacies and sometimes guardianships, adoptions, etc.;
 also called court of probate (Connecticut); surrogate's court (New
 York); Ordinary Court (Georgia); Orphan's Court (Delaware,
 Maryland, New Jersey, Pennsylvania); and Perfect's Court (New Mex).
 Probate Fee - A fee pertaining to probate.
 Property - The assets that are owned by a person.  Quite often
 refers to real estate, or an interest in real estate.
 Public Administrator - In many states, a public official whose main
 duty is to inventory, protect, move, and control all assets until a
 court determines the settlement of the estate of persons who died
 without appointed individuals and have assets not in a trust.
 Pure Trust - A irrevocable trust arrangement, based on the Laws of
 Contract, that does not have a Grantor, which that holds fee simple
 title to the trust assets, and has a termination date.  The
 beneficiaries of which are the holders of Trust Certificate Units
 (TCU's).  Additionally, the trust must not contain three of the
 following: Centralized management, Continuous Life, Easy transfer
 of beneficial interest, or Limited personal liability of trustees.
 Commonly abused by tax resistors and promoters.  Not recommended.
 Quit-Claim Deed - A legal instrument by which one conveys all of
 his right, title and interest in real estate to another without
 giving any guarantees of any kinds as to what, if any, that right
 to, title, or interest in the property is.
 Real Estate - The right, title, or interest that a person has in
 real property that legally are classified as real; opposed to
 personal property.
 Reciprocal Trusts - Trusts made by two or more persons that make
 reciprocal provisions in favor of each other.
 Recordation - Notification to the public by filing with a
 government recorder that confirms trust existence.
 Revocable Trust - A trust which by its terms may be terminated.
 Rule against perpetuities - A rule of common law that makes void
 any estate or interest in property so limited that it will not take
 effect or vest within a limited period of time.
 State Inheritance Taxes - Only pertains to assets or residents in
 certain states.
 State Law - See "Law of Statute".
 TCU's / Trust Certificate Units - In a Pure Trust arrangement,
 the division of the right to receive distributed income and right
 to receive corpus at termination, into 100 units which represent
 one percent each of those rights.
 Tenancy-in-Common - A form of shared ownership where there is no
 right of survivorship.  Tenants-in-common can own property in
 unequal shares, unlike joint tenants who each won an equal share of
 the property. 
 Testamentary Trust - Any trust which is established by will, or
 does not take effect until the death of the Settlor.
 Testate - Leaving a valid will.  Testator - A person who leaves a
 will or testament in force at their death.
 Totten Trust - A simple savings bank trust, revocable at any time
 before the death for the depositor/settlor.
 Trust - A relationship in which one person (the trustee) holds
 title (often subject to a number of conditions) to property for the
 benefit of another person (the beneficiary). A trust is commonly
 used when money is left to people inexperienced in its management
 such as children or as a tax saving device.  A testamentary trust
 is one established by a will. 
 Trust Deeds - See "Deed of Trust".
 Trust Organization Bylaws - Rules determining operations of trust.
 Trustee - The person(s) appointed conserve and administer the
 assets of the trust for the beneficiaries.
 Trustor - Same as Creator, Grantor, or Settlor.
 U.B.O. BUSINESS TRUST - See "Business Trust".
 Will - A legal document in which a person states who he wants to
 inherit his property, etc.