A common form of trust is a passive trust, whereby a trustor gives legal ownership of assets like money or real estate to a trustee, who is then responsible for simply distributing those assets to a beneficiary at a predetermined date.
A passive trust, also known as a dry trust or bare trust, is a type of trust where the trustee holds legal ownership of assets but does not actively manage them. Instead, the trustee’s role is limited to a simple, predefined function, such as distributing the assets to the beneficiary at a predetermined time or under specific conditions. The following examples and case studies illustrate the creation, application, and implications of passive trusts in various legal contexts:
These cases further illustrate the use and interpretation of passive trusts in legal proceedings:
For more detailed information, see our related Wills Trusts And Estates terms: