Active Trust

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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.

BREAKING DOWN '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.

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RELATED FAQS
  1. Can I put my IRA in a trust?

    You cannot put your IRA in a trust while you are living. You can, however, name a trust as the beneficiary of your IRA and ... Read Full Answer >>
  2. How does the trust maker transfer funds into a revocable trust?

    Once a revocable trust is created, a trust maker transfers funds or property into the trust by including them in a list with ... Read Full Answer >>
  3. What is the difference between a revocable trust and a living trust?

    A revocable trust and living trust are separate terms that describe the same thing: a trust in which the terms can be changed ... Read Full Answer >>
  4. How exactly does one go about revoking a revocable trust?

    The basic steps involved in revoking a revocable trust are fairly simple, and include transfer of assets and an official ... Read Full Answer >>
  5. What is the difference between a revocable trust and an irrevocable trust?

    An irrevocable trust and a revocable trust are differentiated through the ability to change the trust. With an irrevocable ... Read Full Answer >>
  6. What is a family Limited Liability Company (LLC)?

    A family limited liability company (LLC) is formed by family members to conduct business in a state that permits such form ... Read Full Answer >>

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