Terminology

Click on the letters below to quickly find the term you’re searching for:
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O| P | Q | R | S | T | U | V | W | X | Y | Z

A

Appointer
The person given the power to remove or appoint the trustees of a trust and the power to nominate the person to be the successor of the appointer.

B

Beneficial ownership

The entitlement to the benefits flowing from a particular asset, as distinct from being recorded as the registered proprietor of that asset.

Beneficiaries (Trusts)

The persons who collectively are entitled to receive income and capital payments from a trust fund, in accordance with the rules set out in the trust deed; persons can be beneficiaries for income only, for corpus only or for both.

Breach of Trust
Action by a trustee outside the trustee’s power.

D

Deed of Settlement

An instrument “signed, sealed and delivered” which sets up a trust and defines its terms.

Deed of Trust

An instrument “signed, sealed and delivered” which sets up a trust and defines its terms.

Discretionary Trust

A trust under which the trustee is given power to make choices or is required to decide from time to time which beneficiaries are to receive income and / or capital distributions from a trust fund.

E

Equity (generally)

The body of rules formulated by the English Court of Chancery to supplement the rules, procedures and deficiencies of the common law.

Executor

A person charged with winding up a deceased estate in accordance with a valid will.

Executrix
(female of “executor”).

F

Family Trust

A trust, set up by a deed of settlement for the benefit of beneficiaries all or most of whom are members of the one family.

Fixed Trust (non – discretionary trust)

A trust under which the deed spells out the specific beneficiaries and their entitlements.

Fixed Trust (non – flexible trust)

A unit trust investing in a share portfolio involving a certain number of specified listed companies in fixed proportions.

Flexible Trust

A unit trust investing in a portfolio of assets chosen with regard to their merit and varied from time to time.

G

Gift

A transfer of property from one person to another with the giver receiving nothing in return.

Grantor

The person who legally creates a trust by executing (signing) the trust deed and by feeding in the initial assets of the trust fund (often early a nominal amount of cash sufficient to satisfy a legal fiction).

H

Hybrid Trust
A trust which is discretionary for income and non – discretionary for capital, or vice versa.

I

Inter Vivos Trust

A trust set up by a living person, as distinct from a trust set up by will.

L

Living Trust

A trust set up by a living person, as distinct from a trust set up by will.

O

Open End Unit Trust

A unit trust under which the manager creates a new units as and when investors apply for them and under which the manger redeems or repurchases units for investors wanting to quit their holdings for cash.

S

Settlement (in relation to a trust)

The foundation of a trust by the execution of a trust deed and the vesting of property in a trustee.

T

Testamentary Trust

A trust set up by will.

Trust

A relationship based on confidence, under which property is held by and formally vested in one party, known as the “trustee”, as its legal owner, but on behalf of other parties who are entitled to the fruits of that ownership – the “beneficiaries” of the trust.

Trust Deed

An instrument “signed, sealed and delivered” which sets up a trust and defines its terms.

Trust Estate

The net assets belonging to a trust.

Trust Instrument

A deed “signed, sealed and delivered” which sets up a trust and defines its terms.

Trustee

A person who holds property in trust for another; the person who administers a trust in accordance with its trust deed and with the law, and who very often exercises various discretionary powers.

U

Unit Trust

A trust fund which is under the legal control of an independent trustee as the legal owner of all assets and which is administered by a fund manager on behalf of investors who want to come into the arrangement as beneficiaries; such a fund is normally divided into a large number of equal parts called “units”, beneficially owned by the various investors who acquire them for cash and who thereby become “unit holders”.