GIFT IN TRUST Meaning and
Definition
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A gift in trust is a legal arrangement where a person, known as the settlor, transfers ownership of assets or property to a trustee for the benefit of another individual or group, known as the beneficiary. This arrangement is typically established through a written trust agreement, which outlines the terms and conditions of the trust.
The purpose of a gift in trust is to ensure that the assets or property are managed and used according to the settlor's specifications for the benefit of the beneficiary. The settlor may have various motivations for creating a trust, such as providing financial support for a minor child, protecting assets from creditors, or preserving a family legacy.
The trustee is responsible for managing the assets in the trust and making decisions in the best interests of the beneficiary. They have a fiduciary duty to act in a responsible and trustworthy manner, adhering to the terms of the trust agreement. The trustee may have the authority to invest the assets, distribute income or principal, and make decisions regarding the use of the trust property.
The beneficiary is the individual or group that will receive the benefits of the trust. Depending on the terms of the trust, they may have access to the income, principal, or both. The settlor can specify various conditions or limitations regarding the use and distribution of the assets, ensuring that the beneficiary receives support while preventing misuse or wastefulness.
Common Misspellings for GIFT IN TRUST
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