Informal Trust

Definition

• An investment account registered in the name of an adult, but is in trust for a child. The trust is used to save or invest funds for a child who can access and use the funds when he or she reaches the legal age. Also known as in-trust account or "bare" trust.

Synonyms
bare trust, in-trust account, informal in-trust account

Related Terms and Acronyms

• Death Benefit (DB) — Acronym, Very Important,
  • A payment or series of payments made to the beneficiaries of a life insurance policy.
  ➥ An amount paid to a beneficiary in a life linsurance policy.
• Estate Planning — Definition,
  • The process of determining how assets will be dispersed after an individual's death, ideally in the most tax-efficient way possible.
• Fiduciary — Definition,
  • An individual, company, or association that manages assets for another party. Fiduciaries include executors of wills and estates, trustees, receivers in bankruptcy, and those responsible for managing the finances of a minor.
• Life Insurance Trust (LIT) — Acronym,
  • A legal entity that is made the beneficiary of a life insurance policy, often arranged to evade taxation.
• Registered Education Savings Plan (RESP) — Acronym, Canada, Very Important,
  • An investment vehicle used for a child's post-secondary education.
  ➥ RESPs are offered by most financial institutions in Canada.
• Survivorship — Definition,
  • The right of a person to secure ownership by reason of his/her outliving someone with whom s/he shared undivided interest in the land.
• Trust — Definition,
  • A fund established like a will, specifying how money or property will be disbursed, lists the recipients or beneficiaries and names one or more trustees to manage the assets. An irrevocable trust can't be changed after the terms are finalized; a revocable trust has more legroom in how much can be transferred, but is usually costlier to maintain.
• Trust Account — Definition,
  • An account used by a law firm or real estate agent to handle earnest money, funds set aside for repairs and other money that the buyer and seller put up before closing.
• Trust Company — Definition,
  • A company that acts as a trustee (an entity that controls financial assets on the behalf of another).
• Trustee — Definition,
  • A person who holds and manages assets for the benefit of beneficiaries.