Active Trust

AAA

DEFINITION of 'Active Trust'

A trust where the trustee is held accountable for additional responsibilities. With an active trust, those additional responsibilities can be in respect to the control or management of the trust, collection of rent, profits, and sale proceeds; in other words the administration of the trust property.


Also referred to as a special trust.

INVESTOPEDIA EXPLAINS 'Active Trust'

An active trust is in contrast to a passive trust in which the trustee performs no active duties. A trust is a relationship where the trustor gives another person, the trustee, the right to hold title to a property or assets for a beneficiary. It is commonly used if the beneficiary is underage or has a disability that impairs them from maintaining their own finances.

RELATED TERMS
  1. Living Trust

    A property interest created during a person's life that allows ...
  2. Testamentary Trust

    A legal and fiduciary relationship created through explicit instructions ...
  3. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  4. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
  5. Trustee

    A person or firm that holds or administers property or assets ...
  6. Trustor

    An individual or organization that gifts funds or assets to others ...
RELATED FAQS
  1. What does U.S. law say about contingent beneficiaries?

    In the United States, posthumous asset transfers only require the listing of a primary beneficiary. Contingent beneficiaries ... Read Full Answer >>
  2. How do I change my contingent beneficiary?

    Keeping your beneficiary designations up to date is an important aspect of comprehensive estate planning. Listing a primary ... Read Full Answer >>
  3. If both the primary and contingent beneficiaries are unavailable, what happens to ...

    One of the most common mistakes in estate planning is not keeping beneficiary designations up to date on life insurance policies ... Read Full Answer >>
  4. What kinds of assets can be included in a revocable trust?

    A revocable trust is an important part of estate planning. The trust document allows a living grantor to receive income from ... Read Full Answer >>
  5. How do you set up a revocable trust?

    A revocable living trust (RLT) is an arrangement in which a grantor transfers ownership of property through a trust. The ... Read Full Answer >>
  6. What types of insurance policies have contingent beneficiaries?

    A contingent beneficiary is a person designated to receive the benefits of an insurance policy or retirement account if the ... Read Full Answer >>
Related Articles
  1. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  2. Retirement

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  3. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  4. Options & Futures

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  5. Retirement

    Should You Put Your Faith In A Trust?

    Many institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
  6. Economics

    What is a Fiduciary?

    A fiduciary is a person who acts on behalf of another person (or people) to manage assets.
  7. Retirement

    Retirement: The Journey Of 1000 Miles

    Substantial time should be set aside to fully outline one's vision for retirement and the specific steps that must be taken to realize it.
  8. Professionals

    Tips for Spreading the Wealth to Relatives

    There are many ways that your clients can move money or other assets to relatives in order to reduce their tax bills. Here's a primer on best practices.
  9. Professionals

    Tips for Handling Client Inheritance

    When clients leave or receive an inheritance, be prepared to deal with much more than mere paperwork or financial transactions.
  10. Professionals

    Advice on Dealing with Unequal Inheritances

    When it comes to inheritances, the concept of equal versus equitable can be hard to navigate, even when all parties are reasonable.

You May Also Like

Hot Definitions
  1. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  2. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  3. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
  4. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
  5. Wash Trading

    The process of buying shares of a company through one broker while selling shares through a different broker. Wash trading ...
Trading Center