Explanation of "Savings Account Trust"
Definition: A "savings account trust" is a type of bank account where one person (the trustee) puts money aside for another person (the beneficiary). The trustee controls the money while they are alive, and after they pass away, the money goes directly to the beneficiary.
Usage Instructions:
A savings account trust is often used in estate planning. This means it's a way to manage money for someone else, especially for children or family members, ensuring they get the money when the trustee is no longer around.
It’s important to choose a trustworthy person as the trustee because they will have control over the money during their lifetime.
Example:
Maria set up a savings account trust for her daughter, Emma. Maria is the trustee, so she manages the account and decides how the money is used. After Maria passes away, the money will go directly to Emma.
Advanced Usage:
In financial planning, a savings account trust can be part of a broader strategy that includes wills and other types of trusts. It provides a way to avoid probate, which is the legal process of distributing a deceased person's assets.
Word Variants:
Different Meanings:
Trust: In general, a legal arrangement where one person holds property for the benefit of another.
Savings Account: A bank account that earns interest on the money deposited.
Synonyms:
Idioms and Phrasal Verbs:
"Set aside": To save or reserve something for a specific purpose. For example, "She set aside money in a savings account trust for her son's education."
"Hand over": To give something to someone else. For example, "When she passes away, she will hand over control of the account to her daughter."
Summary:
A savings account trust is a safe way to save money for someone else, ensuring that they will receive it in the future when needed.