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Simple English definitions for legal terms
gift in trust
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A quick definition of gift in trust:
A gift in trust is when someone gives something to another person without expecting anything in return. The person who receives the gift is called the trustee and they hold onto the gift for someone else, called the beneficiary. This is often done to protect the gift or to make sure it is used for a specific purpose. For example, a parent might give money to a trustee to hold for their child's education.A more thorough explanation:
A gift in trust is a voluntary transfer of property to another person without compensation, where the recipient holds the legal title to the property as a trustee for the benefit of a beneficiary. The trustee manages the property and distributes the income or principal to the beneficiary according to the terms of the trust.
For example, a parent may give a gift of money to a child in trust, with the child as the beneficiary and the parent as the trustee. The parent would manage the money and distribute it to the child according to the terms of the trust, such as for education or medical expenses.
Another example is a charitable gift in trust, where a donor gives property to a charity in trust, with the charity as the beneficiary and a trustee managing the property and distributing the income or principal to the charity according to the terms of the trust.
Gifts in trust can be made during the donor's lifetime (inter vivos) or through a will (testamentary). They can also be revocable or irrevocable, depending on the terms of the trust.