Pure Trust

A contractual trust as opposed to a statutory trust, created under the Common Law. A pure trust is one in which there must be a minimum of three parties(the creator or settlor (never grantor), the trustee and the beneficiary(and each is a separate entity. A pure trust is claimed to be a lawful, irrevocable, separate legal entity.

Similar financial terms

Pure yield pickup swap
Moving to higher yield bonds.

Pure index fund
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.

Pure expectations theory
A theory that asserts that the forward rates exclusively represent the expected future rates. In other words, the entire term structure reflects the markets expectations of future short-term rates. For example, an increasing sloping term structure implies increasing short-term interest rates. Related: biased expectations theories

Pure-discount bond
A bond that will make only one payment of principal and interest. Also called a zero-coupon bond or a single-payment bond.

Pure Equity Trust
A special type of irrevocable trust marketed by promoters. The trust assets are obtained by an exchange of a certificate of beneficial interest in return for the assets, as opposed to traditional means, such as by gifting.

Trust receipt
Receipt for goods that are to be held in trust for the lender.

Trust deed
Agreement between trustee and borrower setting out terms of bond.

Term trust
A closed-end fund that has a fixed termination or maturity date.

REIT (real estate investment trust)
Real estate investment trust, which is similar to a closed-end mutual fund. REITs invest in real estate or loans secured by real estate and issue shares in such investments.

Personal trust
An interest in an asset held by a trustee for the benefit of another person.

Discretionary trust
Discretionary trusts are one of the most flexible trust funds. Once the assets are transferred to the trust fund, the transferor no longer have legal rights to, or ownership of, them. However, the transferor can maintain control by appointing the trustee. The capital the transferor puts into the trust stays there until the time stipulated by the transferor for funds to be paid out or until such time as the trustees decide to do so.

Collateral trust bonds
A bond in which the issuer (often a holding company) grants investors a lien on stocks, notes, bonds, or other financial asset as security.

Generation-skipping trust
A trust in which a principal amount is placed in a trust on the death of person A and is transferred to A's grandchildren when A's children die. However, the income generated from the trust while the children of person A are alive goes to the children of person A.

Adverse trustee
One who has a substantial, beneficial interest in the trust assets as well as the income or benefits derived from the trust. A trustee that is related to the creator by birth, marriage or in an employer/employee relationship.

Asset Protection Trust (APT)
A special form of irrevocable trust, usually created (settled) offshore for the principal purposes of preserving and protecting part of one's wealth offshore against creditors. Title to the asset is transferred to a person named the trustee. Generally used for asset protection and usually tax neutral. Its ultimate function is to provide for the beneficiaries of the APT.

Discretionary Trust
A grantor trust in which the trustee has complete discretion as to who among the class of beneficiaries receives income and/or principal distributions. There are no limits upon the trustee or it would cease to be a discretionary trust. The letter of wishes could provide some guidance to the trustee without having any legal and binding effects. Provides flexibility to the trustee and the utmost privacy.

Independent Trustee
A trustee who is independent of the settlor. Independence is generally defined as not being related to the settlor by blood, through marriage, by adoption or in an employer/employee relationship.

Layered Trusts
Trusts placed in series where the beneficiary of the first trust is the second trust; used for privacy.

Trustee
A person totally independent of the settlor who has the fiduciary responsibility to the beneficiaries to manage the assets of the trust as a reasonable prudent business person would do in the same circumstances. Shall defer to the trust protector when required in the best interest of the trust. The trustee reporting requirements shall be defined at the onset and should include how often, to whom, how to respond to instructions or inquiries, global investment strategies, fees (flat and/or percent ...

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AIBD

Association of International Bond Dealers.


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