Voluntary Trust

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DEFINITION of 'Voluntary Trust'

A type of living trust that is created during the lifetime of the trustor, and is also known as an inter vivos trust. In a voluntary trust, the trustor retains legal title of the gift transferred to the beneficiary, even though the beneficiary has actual title and possession.

A voluntary trust is also defined as an obligation arising out of a personal confidence reposed in, and voluntarily accepted by, one individual for the benefit of another. This is in contrast to an involuntary trust, which is created by law.

BREAKING DOWN 'Voluntary Trust'

No consideration is made in a voluntary trust. In a voluntary trust, the recipient of the trust gives nothing in exchange for the trust but receives it as a pure gift. This distinguishes voluntary trusts from trusts for value, which are trusts made in favor of purchasers and mortgagees.

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RELATED FAQS
  1. What is estate planning?

    Estate planning involves making plans for the transfer of your estate after death. Your estate is all the property that ... Read Full Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. 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 >>

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