Trust (emotion) - Wikipedia
The contingency theory of leadership was proposed by the Austrian psychologist Task refers to task accomplishment, and relationship-motivation refers to the feelings such as trust, loyalty and confidence that the group has for its leader. good leader-follower relations, defined tasks, and strong leader position power. First, let's define the word that they both have in common: "beneficiary." A beneficiary is any person, trust, or entity that is designated by the financial For example, after a marriage or divorce, many people forget to update their desired . In a social context, trust has several connotations. Definitions of trust typically refer to a situation Trust can be attributed to relationships between people. discussed together with trust, are: control, confidence, risk, meaning and power. Trust Sociology acknowledges that the contingency of the future creates dependency.
The term "use of land" was coined, and in time developed into what we now know as a trust. Significance[ edit ] The trust is widely considered to be the most innovative contribution of the English legal system.
Trusts are widely used internationally, especially in countries within the English law sphere of influence, and whilst most civil law jurisdictions do not generally contain the concept of a trust within their legal systems, they do recognise the concept under the Hague Convention on the Law Applicable to Trusts and on their Recognition partly only the extent that they are parties thereto.
The Hague Convention also regulates conflict of trusts. Although trusts are often associated with intrafamily wealth transfers, they have become very important in American capital markets, particularly through pension funds in certain countries essentially always trusts and mutual funds often trusts. The uses of trusts are many and varied, for both personal and commercial reasons, and trusts may provide benefits in estate planningasset protectionand taxes.
Living trusts may be created during a person's life through the drafting of a trust instrument or after death in a will. In a relevant sense, a trust can be viewed as a generic form of a corporation where the settlors investors are also the beneficiaries. This is particularly evident in the Delaware business trust, which could theoretically, with the language in the " governing instrument ", be organized as a cooperative corporation or a limited liability corporation, : One of the most significant aspects of trusts is the ability to partition and shield assets from the trustee, multiple beneficiaries, and their respective creditors particularly the trustee's creditorsmaking it " bankruptcy remote ", and leading to its use in pensions, mutual funds, and asset securitization  as well protection of individual spendthrifts through the spendthrift trust.
Terminology[ edit ] Chart of a trust Appointer: This is the person who can appoint a new trustee or remove an existing one. This person is usually mentioned in the trust deed. In trust law, "appointment" often has its everyday meaning. It is common to talk of "the appointment of a trustee", for example. However, "appointment" also has a technical trust law meaning, either: The trustee's right to do this, where it exists, is called a power of appointment.
Sometimes, a power of appointment is given to someone other than the trustee, such as the settlor, the protector, or a beneficiary. This is the legal term used to imply that an entity is acting as a trustee. A beneficiary is anyone who receives benefits from any assets the trust owns. This term refers to the fact that the trustee is acting on its own behalf. A protector may be appointed in an express, inter vivos trust, as a person who has some control over the trustee—usually including a power to dismiss the trustee and appoint another.
The legal status of a protector is the subject of some debate. No-one doubts that a trustee has fiduciary responsibilities.
If a protector also has fiduciary responsibilities, then the courts—if asked by beneficiaries—could order him or her to act in the way the court decrees. However, a protector is unnecessary to the nature of a trust—many trusts can and do operate without one. Also, protectors are comparatively new, while the nature of trusts has been established over hundreds of years. It is therefore thought by some that protectors have fiduciary duties, and by others that they do not. The case law has not yet established this point.
This is the person or persons who creates the trust.
What Is a Contingent Trust Trustee?
Grantor s is a common synonym. Terms of the Trust means the settlor's wishes expressed in the Trust Instrument. A trust deed is a legal document that defines the trust such as the trustee, beneficiaries, settlor and appointer, and the terms and conditions of the agreement. A trust distribution is any income or asset that is given out to the beneficiaries of the trust.
A person either an individual, a corporation or more than one of either who administers a trust. A trustee is considered a fiduciary and owes the highest duty under the law to protect trust assets from unreasonable loss for the trust's beneficiaries.
Creation[ edit ] Trusts may be created by the expressed intentions of the settlor express trusts  or they may be created by operation of law known as implied trusts. An implied trust is one created by a court of equity because of acts or situations of the parties.
Implied trusts are divided into two categories: A resulting trust is implied by the law to work out the presumed intentions of the parties, but it does not take into consideration their expressed intent. A constructive trust  is a trust implied by law to work out justice between the parties, regardless of their intentions.
Typically a trust can be created in the following four ways: In some jurisdictions certain types of assets may not be the subject of a trust without a written document.
Three certainties The formalities required of a trust depends on the type of trust in question. Generally, a private express trust requires three elements to be certain, which together are known as the "three certainties". These elements were determined in Knight v Knight to be intention, subject matter and objects.
The certainties of subject matter and objects allow the court to administer trust when the trustees fail to do so. These words are construed objectively in their "reasonable meaning",  within the context of the entire instrument. A mere expression of hope that a trust be created does not constitute an intention to create a trust.
Conversely, the existence of terms of art or the word "trust" does not indicate whether an instrument is an express trust. The property subject to the trust must be clearly identified Palmer v Simmonds. One may not, for example state, settle "the majority of my estate", as the precise extent cannot be ascertained. Trust property may be any form of specific property, be it real or personaltangible or intangible. It is often, for example, real estate, shares or cash.
The beneficiaries of the trust must be clearly identified,  or at least be ascertainable Re Hain's Settlement. In the case of discretionary trusts, where the trustees have power to decide who the beneficiaries will be, the settlor must have described a clear class of beneficiaries McPhail v Doulton.
Beneficiaries may include people not born at the date of the trust for example, "my future grandchildren". Alternatively, the object of a trust could be a charitable purpose rather than specific beneficiaries. Trustees[ edit ] A trust may have multiple trustees, and these trustees are the legal owners of the trust's property, but have a fiduciary duty to beneficiaries and various duties, such as a duty of care and a duty to inform.
The trustee may be either a person or a legal entity such as a companybut typically the trust itself is not an entity and any lawsuit must be against the trustees.
A trustee has many rights and responsibilities which vary based on the jurisdiction and trust instrument. If a trust lacks a trustee, a court may appoint a trustee. The trustees administer the affairs attendant to the trust. The trust's affairs may include prudently investing the assets of the trust, accounting for and reporting periodically to the beneficiaries, filing required tax returns and other duties. In some cases dependent upon the trust instrument, the trustees must make discretionary decisions as to whether beneficiaries should receive trust assets for their benefit.
A trustee may be held personally liable for problems, although fiduciary liability insurance similar to directors and officers liability insurance can be purchased.
For example, a trustee could be liable if assets are not properly invested. In addition, a trustee may be liable to its beneficiaries even where the trust has made a profit but consent has not been given. Either immediately or eventually, the beneficiaries will receive income from the trust property, or they will receive the property itself. The extent of a beneficiary's interest depends on the wording of the trust document.
One beneficiary may be entitled to income for example, interest from a bank accountwhereas another may be entitled to the entirety of the trust property when he attains the age of twenty-five years. The settlor has much discretion when creating the trust, subject to some limitations imposed by law.
The use of trusts as a means to inherit substantial wealth may be associated with some negative connotations; some beneficiaries who are able to live comfortably from trust proceeds without having to work a job may be jokingly referred to as "trust fund babies" regardless of age or "trustafarians".
Trusts may be created purely for privacy. The terms of a will are public in certain jurisdictions, while the terms of a trust are not. Trusts may be used to protect beneficiaries for example, one's children against their own inability to handle money.
These are especially attractive for spendthrifts. Courts may generally recognize spendthrift clauses against trust beneficiaries and their creditors, but not against creditors of a settlor. Trusts frequently appear in wills indeed, technically, the administration of every deceased's estate is a form of trust.
Conventional wills typically leave assets to the deceased's spouse if anyand then to the children equally. If the children are under 18, or under some other age mentioned in the will 21 and 25 are commona trust must come into existence until the 'contingency age' is reached.
The executor of the will is usually the trustee, and the children are the beneficiaries. The trustee will have powers to assist the beneficiaries during their minority. In some common law jurisdictions all charities must take the form of trusts. In others, corporations may be charities also.
In most jurisdictions, charities are tightly regulated for the public benefit in England, for example, by the Charity Commission. The trust has proved to be such a flexible concept that it has proved capable of working as an investment vehicle: This form of trust was developed by Paul Baxendale-Walker and has since gained widespread use. Complex business arrangements, most often in the finance and insurance sectors, sometimes use trusts among various other entities e.
Trusts may allow beneficiaries to protect assets from creditors as the trust may be bankruptcy remote. For example, a discretionary trust, of which the settlor may be the protector and a beneficiary, but not the trustee and not the sole beneficiary. In such an arrangement the settlor may be in a position to benefit from the trust assets, without owning them, and therefore in theory protected from creditors. In addition, the trust may attempt to preserve anonymity with a completely unconnected name e.
These strategies are ethically and legally controversial. The tax consequences of doing anything using a trust are usually different from the tax consequences of achieving the same effect by another route if, indeed, it would be possible to do so. In many cases, the tax consequences of using the trust are better than the alternative, and trusts are therefore frequently used for legal tax avoidance.
For an example see the "nil-band discretionary trust", explained at Inheritance Tax United Kingdom. Ownership of property by more than one person is facilitated by a trust.
In particular, ownership of a matrimonial home is commonly effected by a trust with both partners as beneficiaries and one, or both, owning the legal title as trustee. In Canada  and Minnesota monies owed by employers to contractors or by contractors to subcontractors on construction projects must by law be held in trust.
In the event of contractor insolvency, this makes it much more likely that subcontractors will be paid for work completed.
Trust | Definition of Trust by Merriam-Webster
Legal retainer - Lawyers in certain countries often require that a legal retainer be paid upfront and held in trust until such time as the legal work is performed and billed to the client, this serves as a minimum guarantee of remuneration should the client become insolvent. Types[ edit ] Alphabetic list of trust types[ edit ] Trusts go by many different names, depending on the characteristics or the purpose of the trust. Because trusts often have multiple characteristics or purposes, a single trust might accurately be described in several ways.
For example, a living trust is often an express trust, which is also a revocable trust, and might include an incentive trust, and so forth. The concept of an asset-protection trust encompasses any form of trust that provides for funds to be held on a discretionary basis.
Such trusts are set up in an attempt to avoid or mitigate the effects of taxationdivorce and bankruptcy on the beneficiary. Such trusts may be proscribed or limited in their effect by governments and the courts. Unlike an express trust, a constructive trust is not created by an agreement between a settlor and the trustee.
A constructive trust is imposed by the law as an "equitable remedy". This generally occurs due to some wrongdoing, where the wrongdoer has acquired legal title to some property and cannot in good conscience be allowed to benefit from it.
A constructive trust is, essentially, a legal fiction. For example, a court of equity recognizing a plaintiff's request for the equitable remedy of a constructive trust may decide that a constructive trust has been created and simply order the person holding the assets to deliver them to the person who rightfully should have them.
The constructive trustee is not necessarily the person who is guilty of the wrongdoing, and in practice it is often a bank or similar organization. The distinction may be finer than the preceding exposition in that there are also said to be two forms of constructive trust, the institutional constructive trust and the remedial constructive trust.
The latter is an "equitable remedy" imposed by law being truly remedial; the former arising due to some defect in the transfer of property. In a discretionary trust, certainty of object is satisfied if it can be said that there is a criterion which a person must satisfy in order to be a beneficiary i.
In that way, persons who satisfy that criterion who are members of that class can enforce the trust. In these types, a directed trustee is directed by a number of other trust participants in implementing the trust's execution; these participants may include a distribution committee, trust protector, or investment advisor.
The directed trustee's role is administrative which involves following investment instructions, holding legal title to the trust assets, providing fiduciary and tax accounting, coordinating trust participants and offering dispute resolution among the participants Dynasty trust also known as a 'generation-skipping trust': A type of trust in which assets are passed down to the grantor's grandchildren, not the grantor's children.
The children of the grantor never take title to the assets. This allows the grantor to avoid the estate taxes that would apply if the assets were transferred to his or her children first. Generation-skipping trusts can still be used to provide financial benefits to a grantor's children, however, because any income generated by the trust's assets can be made accessible to the grantor's children while still leaving the assets in trust for the grandchildren.
An express trust arises where a settlor deliberately and consciously decides to create a trust, over their assets, either now, or upon his or her later death. In these cases this will be achieved by signing a trust instrument, which will either be a will or a trust deed. Are they sensitive to your problems, worries and fears? Do they show compassion and genuinely care about you?
A person who is trustworthy is able to demonstrate consideration and care of others. Each person in a relationship demonstrates their trustworthiness through consistency in their actions. The first behaviors you look at might be relatively small, like showing up for dates at agreed-upon times.
Again, learning these things in a relationship happens gradually, as you both show that you are consistent with your actions not just occasionally, but all the time. Another way a person shows they are trustworthy is when their words and behavior match up.
When you love someone, you do not abuse them. If you trust someone, you trust them regardless of who they spend time with or where they go. My Trust Was Broken in the Past. How Can I Trust Again? Being hurt by someone in the past may have affected your ability to trust yourself and your own instincts. Are you dealing with trust issues?