A trust is a:
A) form of property ownership created by the government that combines the legal and beneficial ownership of property
B) form of property ownership created by the tort law that separates the legal and beneficial ownership of property
C) form of property ownership created by the common law that combines the legal and beneficial ownership of property
D) form of property ownership created by the common law that prevents people from stealing inheritance money from their co-inheritors
E) none of the other choices are correct

Question

Quizplus · Accepted Answer

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts are established to provide legal protection for the trustor's assets, to ensure those assets are distributed according to the trustor's wishes, and sometimes to avoid or reduce estate taxes. The definition of a trust does not strictly fit into the descriptions given in options A, B, C, or D, as they either inaccurately describe the nature of trusts or apply a too narrow or incorrect rationale for their creation. Trusts are indeed creations of common law, but they do not combine legal and beneficial ownership; rather, they distinctly separate these roles between the trustee and the beneficiaries.

A Trust Is A