What does a trust refer to in legal terms?

A trust, in legal terms, is a fiduciary arrangement that allows one party, known as the trustee, to hold property or assets for the benefit of another party, referred to as the beneficiary. This arrangement is designed to ensure that the assets are managed and distributed according to the terms set forth by the grantor, or the person who creates the trust.

Trusts can be created for various purposes, such as estate planning, providing for minor children, or charitable giving. They help in managing how assets are used, protecting them from creditors, and potentially reducing estate taxes. The legal framework around trusts ensures that the interests of the beneficiaries are prioritized and that the trustee performs their duties in a responsible manner.

Understanding this concept is essential for anyone involved in legal practices related to estate management, financial planning, or family law, among other areas. The distinction of a trust as a method to hold property for another's benefit is fundamental to its purpose and functionality in the legal system.