Definition

Noun: A passive trust is a type of trust in which the trustee has no active duties to perform. The trustee's role is essentially to hold the legal title to the property, while the beneficiary has the right to manage and use it.

Usage

This term is used in legal and financial contexts, specifically in the field of trusts and estates. It describes an arrangement where the trustee's responsibility is minimal and often merely formal.

Examples

• The inheritance was set up as a passive trust, so the trustee simply held the title to the house while the beneficiary lived in it.
• In a passive trust, the beneficiary directs all investments and management decisions.

Advanced Usage

• Legal Contrast: A passive trust is often contrasted with an "active trust" or "special trust," where the trustee has specific, active management duties.
• Historical Context: The concept is important in trust law for distinguishing when a trustee's powers are merely nominal versus when they involve fiduciary discretion.

Variants and Related Words

• Active Trust (n): A trust in which the trustee has specific, active duties to perform in managing the trust property.
• Bare Trust (n): A similar concept where the trustee holds property with no active duties, essentially for the benefit of another.
• Trustee (n): The person or institution that holds the legal title to property in a trust.
• Beneficiary (n): The person who benefits from the trust.

Synonyms

• Bare Trust
• Simple Trust (in some contexts, though this can have other specific legal meanings)
• Nominal Trust

Antonyms

• Active Trust
• Special Trust
• Fiduciary Trust (implying active duties)

Noun

1. a trust in which the trustee performs no active duties