Definition of Active trust:
An active trust is a type of trust, a legal relationship entered into by at least three parties—the trustor, the trustee, and the beneficiary—for the purposes of transferring property from the trustor to the beneficiary. In the U.S., laws that govern trusts vary from state to state. The National Conference of Commissioners on Uniform State Laws, a nonprofit association that promotes the adoption of uniform laws from state to state, issued the Uniform Trust Code in 2000, which dozens of states have adopted at least in part.
A trust that imposes administrative or management duties on the trustee other than that of simply transferring the trust property to the beneficiary.
An active trust is a trust wherein the trustee has to take additional actions beyond passively dealing with property for the benefit of the beneficiary. Active trusts are also referred to as special trusts. An active trust is different than a passive trust, or bear trust. In a passive trust, the trustee’s only responsibility is to care for, and then transfer property, at a predetermined time to the beneficiary.
Trust where the trustee (called active trustee) has active duties, in addition to the duty of handing over the trust assets to its beneficiary. Such duties may include collection and transfer (to the beneficiary) of profits, rents, and/or sale-proceeds. Also called special trust. See also bare trust.
How to use Active trust in a sentence?
- Active trusts are different than ordinary trusts, which tend to be more passive, where the trustee has mainly a hands-off role unless called upon by specific events or timetables.
- An active trust requires the active participation of the trustee to manage and carry out its directives.
- Active trusts may prohibit disbursements to beneficiaries for certain reasons or only payout if beneficiaries follow through with certain pre-established benchmarks.
Meaning of Active trust & Active trust Definition