passive trust

Definition of "passive trust"
  1. A type of trust where the trustee doesn't have any responsibilities to fulfill; a situation in which the beneficiaries are given both legal and equitable titles. This is sometimes referred to as a dry trust or naked trust
How to use "passive trust" in a sentence
  1. The benefactor established a passive trust for his niece, providing her with full legal and equitable titles.
  2. Although a passive trust doesn't require action from the trustee, it can still be a part of estate planning.
  3. Since the passive trust grants full rights to the beneficiary, the trustees don't have any duties in managing the assets.

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