A trust is a legal arrangement in which property is held for the benefit of a third party by a(n)

A trust is a legal arrangement in which property is held for the benefit of a third party by a(n)

• A. beneficiary
• B. trustor
• C. trustee
• D. attorney-in-fact

Answer: (C)

A trust is fundamentally a legal relationship that involves three crucial parties: the trustor (the person who creates the trust), the trustee (the individual or entity responsible for managing the trust), and the beneficiary (the individual or group that benefits from the trust). In this context, the trustee is the one who holds the property in the trust and is entrusted with the responsibility of managing and distributing the assets according to the terms set out in the trust document. The role of the trustee is pivotal; they must act in the best interest of the beneficiaries, ensuring that the trust's assets are managed prudently and in accordance with the law. This position requires a high level of duty, commonly referred to as a fiduciary duty, which holds the trustee accountable for the proper handling of the assets. This encompasses making investment decisions, distributing income or principal to the beneficiaries, and maintaining accurate records of all transactions related to the trust. The other roles mentioned have distinct functions. The beneficiary is the recipient of benefits from the trust, while the trustor is the creator of the trust arrangement. An attorney-in-fact is typically someone designated to act on behalf of another person in legal or financial matters, but they do not play a role in the formation or management of trust

A trust is fundamentally a legal relationship that involves three crucial parties: the trustor (the person who creates the trust), the trustee (the individual or entity responsible for managing the trust), and the beneficiary (the individual or group that benefits from the trust). In this context, the trustee is the one who holds the property in the trust and is entrusted with the responsibility of managing and distributing the assets according to the terms set out in the trust document.

The role of the trustee is pivotal; they must act in the best interest of the beneficiaries, ensuring that the trust's assets are managed prudently and in accordance with the law. This position requires a high level of duty, commonly referred to as a fiduciary duty, which holds the trustee accountable for the proper handling of the assets. This encompasses making investment decisions, distributing income or principal to the beneficiaries, and maintaining accurate records of all transactions related to the trust.

The other roles mentioned have distinct functions. The beneficiary is the recipient of benefits from the trust, while the trustor is the creator of the trust arrangement. An attorney-in-fact is typically someone designated to act on behalf of another person in legal or financial matters, but they do not play a role in the formation or management of trust