Trusts

Question 1

Beneficiary

Answer 1

One for whose benefit a trust is created; the lender in a deed of trust agreement

Question 2

Blind Trust

Answer 2

A trust in which the beneficiary is not disclosed

Question 3

Land Trust

Answer 3

A real estate trust wherein the person who creates the trust, the trustor, is also its beneficiary; a trust created solely for the ownership, operation, and management of real estate interests

Question 4

Living Trust

Answer 4

Also known as an interviors trust; created and takes effect during the trustor’s lifetime; a living trust relieves the trustor of the responsibility of handling the estate

Question 5

Real Estate Investment Trust (REIT)

Answer 5

A means of pooling investor money by using the trust form of ownership and featuring single taxation of profits. IRS rules require a minimum of 100 investors and distribution of 95 percent of profits to investors annually

Question 6

Subchapter S Corporation

Answer 6

A corporation that, for federal tax purposes only, is taxed similarly to a partnership; the corporate entity is disregarded for most federal tax purposes, and the shareholders are generally taxed as individual partners

Question 7

Testamentary Trust

Answer 7

Similar to a living trust, except that it is set up in a will and takes effect upon the maker’s death

Question 8

Trust

Answer 8

An entity created to own assets, including real and personal property, for the benefit of a person, persons, or another entity

Question 9

Trustee

Answer 9

One who holds property in trust for another; in a deed of trust, the person who holds bare legal title in trust

Question 10

Trustor

Answer 10

One who conveys his or her property to a trustee to be held on the behalf of a beneficiary