What Is a Trust?

Aynsley Moore

Sep 15, 2021

A trust is a property transfer and management design based on the principles of equity in the Anglo-American law system. Although the trust system has a long history in the common law system and many non-common law countries have also adopted the fiduciary system, countries have different definitions of trust.

Professor George Bogert of the United States defined it in Handbook of the Law of Trusts as “a fiduciary relationship” in which one party (in the fiduciary relationship) holds the ownership of the property and is responsible for managing and disposing of the property for the benefit of others. German professor Helmut Coing believes that the trust is a disposition or right entrusted by a person for the benefit or objective purpose of another

For example, A opened a “special needs trust for B” in Bank 1 and deposited one million dollars for a ten-year period when his son B was twelve years old. During this period, Bank 1 could use this amount of money to buy coupons and bonds to earn interest. When the period expires, Bank 1 needs to pay one million dollars and the accumulated interest for ten years to B, which is the most typical trust arrangement.