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.

RELATED TERMS
  1. Trustee

    A person or firm that holds or administers property or assets ...
  2. Trust Property

    Assets that have been placed into a fiduciary relationship between ...
  3. Trust

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

    A straightforward type of trust into which a trustor transfers ...
  5. Alimony Substitution Trust

    A trust agreement in which a divorced person agrees to pay spousal ...
  6. Beneficiary Of Trust

    A beneficiary of trust is a person for whom a trust was created, ...
Related Articles
  1. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  2. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  3. Managing Wealth

    Surprising Ways a Trust Could Help Your Family

    Everything you always wanted to know about setting up trusts, in handy glossary form.
  4. Managing Wealth

    How to Set Up a Trust Fund in Canada

    You don't have to be rich to make use of a trust fund. Rules can be complex; here's what you'll need to discuss with your lawyer.
  5. Financial Advisor

    Irrevocable Trusts: New Trends You Need to Know

    Several improvements and additional provisions have been added to irrevocable trusts in recent years making them considerably more versatile than before.
  6. Financial Advisor

    Should You Put Your Faith In A Trust?

    Many institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
  7. Managing Wealth

    What's a Trust?

    A trust is a fiduciary relationship in which one party gives another party the right to hold property or assets on behalf of a beneficiary.
  8. Investing

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  9. Managing Wealth

    Surprising Uses for Trust Funds

    Here are five common situations where a trust fund makes financial sense.
  10. Managing Wealth

    Special Trusts For Special Needs

    If you or someone you love has a disability, these trusts can help ease the cost of care.
RELATED FAQS
  1. What is the difference between revocable and irrevocable intervivos trusts?

    Learn what an inter-vivos trust is, the difference between an irrevocable and a revocable inter-vivos trust, and why it is ... Read Answer >>
  2. What is the difference between a revocable trust and a living trust?

    Learn how a revocable trust and living trust are two terms used to describe the same thing and what the key provisions are ... Read Answer >>
Hot Definitions
  1. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  2. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  3. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  4. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  5. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  6. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
Trading Center