Trust – a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary)

trust:
verb.

1To have confidence in a person; to extend credit to a person.  Putnal v Inman, 76 Fla 553, 80 So 316, 3 ALR 1580.

trust:
n. (15c.)

1. A fiduciary relationship; a matter of confidence.  54 Am J1st Trusts § 4.

2. A confidential relationship involving a trustee, beneficiary, and a res consisting in property.  54 Am J1st Trusts § 4.

3. The legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter, which performance can be compelled in a court of equity or a court which follows equitable principles.  54 Am J1st Trust § 4.

4. The separation of the same estate into parts, legal and equitable, the owner of either part being entitled to the aid of the court in establishing and enforcing his rights. McDonogh v Murdoch (US) 15 How 367, 14 L Ed 732.

5. A monopoly.  State ex rel. Watson v Standard Oil Co. 49 Ohio St 137, 30 NE 279.

     The word is often employed in law, as well as in popular language, in a sense which is much broader than its ordinary technical significance, as denoting or as synonymous with confidence, fiduciary relationship, etc., and it is often used in reference to the confidential aspect of any kind of a bailment or possession by one person of the property of another.  In its literal significance the word “trust“ implies nurturing and sheltering of a sacred confidence.  In its more technical significance, the word still implies such confidence in a relationship which involves a trustee, beneficiary, and a res.  55 Am J1st Trusts § 4.

     As the word is used in the law pertaining to unlawful combinations and monopolies, a “trust” concerning the administration of the estate.  9 Am J2d Bankr § 623.  See official trustee. [1]

1. The right, enforceable solely in equity, to the beneficial enjoyment of property to which another person holds the legal title; a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary).  For a trust to be valid, it must involve specific propertyreflect the settlor’s intent, & be created for a lawful purpose. The two primary types of trusts are private trusts & charitable trusts. 

2. A fiduciary relationship regarding property & charging the person with title to the property with equitable duties to deal with it for another’s benefit; the confidence placed in a trustee, together with the trustee’s obligations toward the property & the beneficiary.  A trust arises as a result of a manifestation of an intention to create it.

3. The property so held. [2]

     Excerpt from William C. Dunn’s Trusts for Business Purposes (1922):

     “In its technical sense, a trust is the right, enforceable solely in equity to the beneficial enjoyment of property, the legal title of which is vested in another and implies separate coexistence of the legal and the equitable titles vested in different persons at the same time; in its more comprehensive sense the term embraces every bailment, every transaction by agent or factor, every deposit, and every matter in which the slightest trust or confidence exists. The word trust, however, is frequently employed to indicate duties, relations, and responsibilities which are not strictly and technically trusts.” [3]

     Excerpt from Tony Honoré’s The South African Law of Trusts (1985):

     “One must distinguish,… [in] countries where English is spoken, between a wide and a narrow sense of the word ‘trust.’  In the wide sense a trust exists when property is to be held or administered by one person on behalf of another or for some purpose other than his own benefit… In the narrow or strict sense a trust exists when the creator of the trust… hands over or is bound to hand over the control of an asset which, or the proceeds of which, is to be administered by another (the trustee
or administrator) in his capacity as such for the benefit of some person (beneficiary) other than the trustee or for some impersonal object. A trust in this sense is a species of the genus ‘trust’ in the wide sense.“ [4]

     Excerpt from Austin W. Scott & William F. Fratcher, The Law of Trusts (4th ed. 1987):

     “Some courts and legal writers have defined a trust as a certain kind of right that the beneficiary has against the trustee, or a certain kind of interest that the beneficiary has against the trustee, or a certain kind of interest that the beneficiary has in the trust property, thus looking at it from the point of view of the beneficiary. While it is true that the beneficiary has the right or interest described, the trust is something more than the right or interest of the beneficiary.  The trust is the whole juridical device: the legal relationship between the parties with respect to the property that is its subject matter, including not merely the duties that the trustee
owes to the beneficiary and to the rest of the world, but also the rights, privileges, powers, and immunities that the beneficiary has against the trustee and against the rest of the world. It would seem proper, therefore, to define the trust either as a relationship having certain characteristics stated in the definition or perhaps as a juridical device or legal institution involving such a relationship.” [5]

     Excerpt from Restatement (Third) of Trusts 5 2 cmt. f (2003):

     “In the strict, traditional sense, a trust involves three elements:

(1) a trustee, who hold the trust property & is
subject to deal with it for the benefit of one or
more others
(2) one or more beneficiaries, to whom & for
whose benefit the trustee owes duties with respect to the trust property
(3) trust property, which is held by the trustee for
the beneficiaries.  In a more comprehensive sense, the trust purpose is often included in discussions of the elements of the trusts…  Although all of these elements are present in a complete trust, either or both of elements (1) and (2) above may be temporarily absent without destroying the trust or preventing its creation.” [6]

References:

Disclaimer: All material throughout this website is pertinent to people everywhere, and is being utilized in accordance with Fair Use.

[1]:   Ballantine’s Law Dictionary with Pronunciations
Third Edition
 by James A. Ballantine (James Arthur 1871-1949).  Edited by William S. Anderson.  © 1969 by THE LAWYER’S CO-OPERATIVE PUBLISHING COMPANY.  Library of Congress Catalog Card No. 68-30931

[2]: Black’s Law Dictionary Deluxe Tenth Edition by Henry Campbell Black & Editor in Chief Bryan A. Garner. ISBN: 978-0-314-62130-6

[2]: William C. Dunn, Trusts for Business Purposes 2 (1922)

[3]: Tony Honoré, The South African Law of Trusts 55 1-2, at 1-3 (3d ed. 1985).

[4]: 1 Austin W. Scott & William F. Fratcher, The Law of Trusts 52.4, at 42 (4th ed. 1987)

[5]: Restatement (Third) of Trusts 5 2 cmt. f (2003)

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trustee of express trust. A trustee duly appointed or designated, as distinguished from a trustee de son tort or a trustee under a constructive trust. The term includes a person with whom, or in whose name, a contract is made for the benefit of

another. Muncie Natural Gas Co. v Muncie, 160 Ind 97, 66 NE 436.

trustee process. A remedy akin to garnishment, that is, a proceeding whereby property, money or credits of a debtor in possession of another, the garnishee, are applied to the payment of the debts by means of process against the debtor and garnishee. Pennsylvania Railroad Co. v Rogers, 52 W Va 450, 44 SE 300. The remedy of garnishment. 6 Am 12d Attach § 2.

truster. The maker or creator of a trust. Sometimes applied to the person upon whom a trust is conferred. lnteralhed Commercial Co. v Standard

Beryllium Corp. 39 Misc 2d 269, 240 NYSZd 433.

trust estate. The res of a trust. The fund or property held by the trustee for the benefit of the eestui que

trust. The expression seems to be used with some con

fusion in the books. Sometimes it is employed to express the estate of the trustee, and sometimes that of the eestui que trust. C00per v Cooper, 6 NJ Eq 9, 12.

trust ex delicto. See trustee ex delicto.

trust ex maleticio (trust ex ma-le-ti’she-o). See trustee ex malelicio.

trust for value. A trust created by the trustor in return for a \aluable and adequate consideration

trust fund. A fund held in trust by a trust company

or other trustee. See following trust fund or property; special

deposit.

trust fund doctrine. The principle, commonly known as the American doctrine, that the property of a corporation must be appropriated to the payment of debts before any assets are distributed among stockholders. Wood v Dummer (CC Me) 3 Mason 308, F Cas No 17944; Hospes v Northwestern M f g. & Car Co. 48 Minn 174, 50 NW 1117. Sometimes stated broadly as meaning that the assets of a corporation constitute a trust fund for the benefit of its creditors. 19 Am 12d Corp § 1021. The equitable principle that the assets of an insolvent corporation become, from the date of its assured insolvency, a trust fund for equal distribution among its creditors. so that thereafter none of them can obtain priorit y by levy of or by recovering a judgment and cvying an execution against the corporation. 19 Am 12d Corp § 1579. The principle that the capital stock of a corporation, at least, of an insolvent corporation, is in equity a trust fund for the payment of its creditors, regardless of whether it has been paid into the company or exists in the form of unpaid instalments upon stock subscriptions. 19 Am 12d Corp § 722. The doctrine under which subscribers to stock in a corporation are liable for a balance due on their unpaid subscriptions after the dissolution of the corporation, although the subscriptions were obtained fraudulently and although the charter of the corporation was annulled, ex oked, and cancelled for fraud practiced on the

\ ate in securing the articles of incorporation. State

ex icl Hmncr v Assmiatcd Parking (4) 216 Iowa 10“, 90 AI R 1H9, 249 NW 761

As to uhcthcr the insolvency (if the corporation pictludcs the testissiun of a subscription contract on the gimmd of hand [\tttLttct‘d upon the sub seiihcr, see 18 Am 32d (nip 5 no

trust fund immunity. lhe ptttttlpic that while a chant} is not immune 1min liability in tort or from “I” uhcrc it is sought to impose a tort liability upon it. the tiust piopcity or funds by which it is sup potted or maintained cannot be reached by execution under a judgment obtained against it in an

action to recover damages for a tort. 15 Am 12d Char § 157.

trust fund theory. See trust fund doctrine; trust fund immunity.

trust indenture. An instrument which states the terms and conditions of a trust, such as a pension

trust or a trust created by way of security for a bond issue.

Trust Indenture Act. A federal statute of 1939 having apurpose comparable to that of other federal securities legislation, namely to afford the public

protection in connection with securities. 15 USC §§ 77aaa etc.

trusting. In some contexts, a precatory word operating in the creation of a trust. Anno: 49 ALR 81.

trusting and believing. In some contexts, a precatory expression Operating in the creation of a trust.

Anno: 49 ALR 82.

trusting and confiding. In some contexts, a precatory expression Operating in the creation of a trust.

Anno: 49 ALR 81.

trust in invitum (in in-vi’tum). A trust raised by Operation of law without the consent of the trustee. Such a trust arises where goods have been stolen or converted to the use of the taker and sold, with respect to the proceeds, whether such proceeds are in the form of money or other prOperty purchased therewith, and equity will in such cases enforce a trust in invitum in the original taker or in his assignee with notice. Likewise, where a trustee or other tiduciary has misapplied trust funds a like

trust will be raised. Lightfoot v Davis, 198 NY 261, 91 NE 582.

See trustee de son tort.

trust inter vivos. (trust ‘in’ter vi’cvos). A trust which becomes effective during the life of the settlor; in other words, a living trust. 54 Am J 1st Trusts § 5.

trustor (trus’tor). The grantor, creator, maker, or settlor of a trust.

trust patent to Indians. See restricted allotment.

trust power. A power of appointment or disposal to be exercised by the donee of the power for the genelit of one other than himself. 41 Am J lst Pow

3.

Trust powers are imperative and their performance may be compelled in equity. In every case where the trust is valid as a power, the lands to which the trust relates remain in or descend to the person otherwise entitled, subject to the execution of the trust as a power. Tilden v Green, 130 NY 29, 28 NE 880.

trust pursuit rule. The following of trust property wrongfully converted by the liduciary for the purpose of compelling restitution to the beneliciary. 54 Am Jlst Trusts § 248.

See following trust fund or property

trust receipt. A security transaction intended to aid in hnaneing importers and retail dealers who do not have sutiicicnt resources to finance the importation or purchase of merchandise, and who may be una. ble to acquire credit except through utilization av, collateral of the merchandise imported or pur.

chased. 53 Am Jlst “Ir Rec § 1. A comparatively modern instrument of security protecting a bank or finance company for money advanced or credit

given for the purchase of goods by a dealer, the

bank or finance company receiving title from the

manufacturer and taking from the dealer 3 statement that he holds the goods in trust for the bank or finance company, it being contemplated by the transaction that the dealer will resell the goods and repay the bank or finance company, and that the ultimate buyer or consumer will obtain clear title.

47 Am Jlst Sales § 838; 53 Am Jlst Tr Rec §2.

Trust Receipts Act. One of the uniform statutes. Repealed by the Commercial Code. 15 Am 12d

Com C §6.

trust relationship. See fiduciary relation; trust.

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