Glossary of Trust Terms


ABSTRACT OF TITLE: A condensed history of the title to land, consisting of a synopsis or summary of the material or operative portion of all conveyances, of whatever kind or nature, which in any manner affect said land, together with a statement of all liens, charges, or liabilities to which it is in any way material for the purchaser to be apprised.

ACCEPTANCE: The taking of something offered or given. Favorable reception; approval. A taking as true and satisfactory; belief.

ACKNOWLEDGMENT:    Admission, concession, confession, avowal. Admission of the

existence or truth of anything. Law, an official certificate in legal form; admission of a debt or other liability.

ADVERSE PARTY   One who serves upon a decision making board and has a personal interest in the results which may be in conflict with the self interest of the other members of the board. With regard to the Business Trust Organization, it is a trustee whose position of self interest is in opposition to that of the other trustees, especially if one of the other trustees was also the Creator. This opposition or adversity of self interest is recognized through the holding of greater portions of beneficial interest.

AGREEMENT: An understanding reached by two or more persons, groups of persons, etc. The act. of coming to a mutual understanding. Correspondence between words with respect to number, case, gender, person, etc.; concord, concurrence, accord, pact, covenant.

ALLODIALr Free, not holden of any lord or superior; owned without obligation of vassalage or fealty; the opposite of feudal.

ALLODIUM: An estate held by absolute ownership, without recognizing any superior to whom any duty is due on account thereof. In the U.S. the title to land is essentially allodial, and every tenant in fee simple has an absolute and unqualified dominion over it; yet in technical language his estate is said to be in fee, a word which implies a feudal relationship, although such relation has ceased to exist in any form, while in several states the lands have been declared to be allodial. In England there was no allodial-tenure, for all land is held mediately or immediately ot the king; but the words “tenancy in fee simple” are there properly used to express the most absolute dominion which a man can have over his property.

ASSETS: The word has come to signify everything which can be made available for the payment of debts; and is always used when we speak of the means which a party has, as compared with his liabilities or debts. All the stock in trade, cash, and all available property belonging to a merchant or company.

ASSET CURRENCY: A currency that is backed by all who are legally or equitable chargeable with its obligation, and with everything which can be made available for the payment of debt. The Federal Reserve Act of 1913 converted the currency of the United States to an Asset Currency.

ASSIGNMENT: In Contracts. A transfer or making over to another of the whole of any property, real or personal, in possession or in action, or of any estate or right therein. Every demand connected with a right of property, real or personal, is assignable. To make an assignment valid at law, the subject of it must have an existence, actual or potential, at the time of the assignment. The proper technical and operative words in assignment are “assign, transfer, and set over;” but “give, grant, bargain, and sell” or any other words which show the intent of the parties to make a complete transfer, will work an assignment. Since an assignment is the relinquishment or transfer of a valuable right from one person to another, it is subject to many of the legal requirements of Deeds and Bills of Sale. Under an assignment, the assignee obtains only those property rights that the assignor had and nothing more.

ASSOCIATION: An unincorporated society; a body of persons united and acting together without a charter, but upon the methods and forms used by incorporated bodies for the prosecution of some common enterprise. It is fundamentally a large partnership, from which it differs in that it is not bound by the acts of the individual partners, but only by those of its managers or trustees, and that shares in it are transferable, and it is not dissolved by the retirement, death, or bankruptcy of its individual members.

BENEFICIAL INTEREST: Profit, benefit, or advantage resulting from a contract, or the ownership of an estate as distinct from the legal ownership or control. A cestui que trust has the beneficial interest in a trust estate while the trustee has the legal estate.

BENEFICIARY: A person for whose benefit a trust exists. A person who receives, or is named to receive, money or property from a trust.

BILL OF SALE: In Contracts. A written agreement, formerly limited to one under seal, by which one person assigns or transfers his right to or interest in goods and personal chattels to another. It is in frequent use in the transfer of personal property, especially that of which immediate possession is not or cannot be given. The effect of a Bill of Sale is to transfer the property in the thing sold.

BUSINESS: That which occupies the time, attention, and labor of men for the purpose of a livelihood or profit. “Business” is often synonymous with calling, occupation, or trade. The doing of a single act pertaining to a particular business will not be considered engaging in or carrying on the business; yet a series of such acts would be so considered.

BUSINESS TRUST ORGANIZATION: An unincorporated organization created and managed by “trustees” for the benefit and profit of persons who hold or may acquire transferable certificates. Similar to stock certificates of a corporation, trust certificates provide individual holders evidence of interest in a trust estate.

A Business Trust Organization often is called a “common-law trust” but this phrase is not descriptive of any of the peculiar characteristics of such organizations.

The basis for the terminology “common-law trust” is that they are created under the common law of contracts and do not depend upon any statute.

As indicated by its name, a Business Trust is an estate adapted to business or commercial activities. Reduced to its bare essentials, the Business Trust Organization consists of a combination of capital vested in trustees who manage the entity profitably for trust holders of beneficial interest.

CAPITAL UNITS: The beneficial interests in a Business Trust Organization are divided into Capital Units, evidenced by certificates, conveying to the holder the limited rights to receive their pro-rata share of any distributions of income or assets that may be made by the trustees.

The Capital Units are personal property which convey neither legal title to the property nor any voice in the management of the business or the selection of trustees.

CERTIFICATE   A certificate of a Business Trust Organization’ represents ownership of Capital Units and is issued by the trustee under authorization of the Indenture. The holder has no power, sway, or influence over the Business Trust Organization or its assets; only a dependence on chance that by sole discretion of the trustees, action will be taken to authorize a distribution. At death of holder, it is null and void.

CERTIORARI    In Practice. A writ issued by a superior to an inferior court of record, requiring the latter to send in to the former some proceeding therein pending, or the records and proceedings in some cause already terminated in cases where the procedure is not according to the course of the common law. It is the practice of the United States Supreme Court, upon a suggestion of any defect in the transcript of the record sent up into that court upon a writ of error, to allow a special certiorari, requiring the court below to certify more fully.

CESTUI QUE TRUST: He who has a right to a beneficial interest in and out of an estate the legal title to which is vested in another. He may be said to be the equitable owner but has no legal title to the estate, as he is merely a tenant at will if he occupies the estate; and, therefore, may be removed from possession in an action of ejectment by his own trustee.

CESTUI QUE USE: He for whose use and benefit lands or tenements are held by another person. He who has a right to receive the profits and benefits of the estate, but the legal title and possession, together with the duty of defending the same reside in the other.

CHATTEL: Every species of property, moveable or immovable, which is less than a freehold.

CHOSE IN ACTION: A right to receive or recover a debt, or money, or damages for breach of contract, or for a tort connected with contract, but which cannot be enforced without action.

CIVIL ACTION: In Practice. In the Civil Law. A personal action which is instituted to compel payment, or the doing of some other thing which is purely civil. At Common Law. An action which has for its object the recovery of private or civil rights or compensation for their infraction.

CIVIL LAW: This term is generally used to designate the Roman jurisprudence, or Roman Civil Law. In its most extensive sense, the term Roman Law comprises all those legal rules and principles which were in force among the Romans, without reference to the time when they were adopted. But in a more restricted sense we understand it to be the law compiled under the auspices of the Emperor Justinian. This system of law is the antithesis of the Common Law in that its fundamental premise is that sovereignty resides in a ruler, or ruling body; whereas the fundamental premise of the Common Law is that sovereignty resides in the individual, and in the people as a whole. The influence upon (and, indeed, the usurpation of) principles, practices and usages of the Common Law System in the United States by Roman Civil Law jurisprudence cannot be denied by the impartial inquirer.

COLLATERAL: That which is by the side, and not the direct line; that which is additional to or beyond a thing.

COLOR OF TITLE       The appearance, semblance, or simulacrum of title. Also termed “apparent title.” Any fact extraneous to the act or mere will of the claimant, which has the appearance on its face, of supporting his claim of a present title to land, but which, for some defect, in reality falls short of establishing it. Any instrument having a grantor and a grantee, and containing a description of the lands intended to be conveyed, and apt words for their conveyance, gives color of title to the lands described. Such an instrument purports to be a conveyance of title, and because it does not, for some reason, have that effect, it passes only color or the semblance of title.

COMMERCE: The exchange of goods, productions, or property of any kind. Intercourse by way of trade and traffic between different peoples or states and the citizens or inhabitants thereof, including not only the purchase, sale, and exchange of commodities, but also the instrumentalities and agencies by which it is promoted and the instrumentalities and agencies by which it .is carried on, and the transportation of persons as well as of goods, both by land and by sea. The words “commerce” and “trade” are often used interchangeably; but, strictly speaking, commerce relates to intercourse or dealings with foreign nations, states, or political communities, while trade denotes business intercourse or mutual traffic within the limits of a state or nation, or the buying, selling, and exchanging of articles between members of the same community.

COMMON LAW: The Law of Conscience as applied to governing the affairs and actions of the individual, and the affairs between individuals. Its essence is the golden rule. Its science is the science of living honestly with one’s self and with other individuals. It is the coalescing of the two great powers bestowed upon man by his creator – the power to reason and the power of the spirit, working together in harmony with the laws of God and nature. It is loyalty-to-self, loyalty-to-truth, as revealed to each individual through his conscience. Being the Law of Conscience, it cannot be written – it can only be written about. All that can be written about the Common Law is how it manifests itself through the individual who is loyal to self – loyal to his conscience. It is frequently said that Common Law is custom and usage from immemorial antiquity, that Common Law is the judgments and decrees of courts recognizing these usages and customs, that Common Law is the statutory and case law background of England and the American Colonies before the American Revolution – and now, our courts tell us that there is such a thing as “specialized federal common law,” or just “federal common law.” None of these are Common Law in its true sense and meaning. At best, they are manifestations of individual decisions and actions in particular situations, pursuant to conscience. Al worst, they are manifestations of decisions and actions in situations wherein reason, spirit, and conscience of the individuals involved were stifled or suspended. To say otherwise is to lose or change the important thing – the true meaning of Common Law.

COMMON LAW SYSTEM: A system devised by man for the sole purposes of creating a forum in which the Common Law, the Law of Conscience, can flourish and function in the resolution of controversies, and in the determination and application of justice. The heart of this Common Law System is a Common Law jury of twelve randomly selected from the community in order to maximize the probability that, by each individual juror being loyal to his own conscience, the jury will represent the conscience of the community as a whole. Any system, or the aspect of a system, that suspends or interferes with the reasoning power and conscience of a juror is not a common law system, or any part thereof.


CONSIDERATION: Law. Something given or done as a return for something given or done by another, without which no contract is binding. The acts or promises which serve as the basis of the bargain on both sides.

CONSTRUCTIVE: That which amounts in view of the law to an act, although the act itself is not really performed.

CONSUMMATE: To complete; realize, fulfill, to fulfill or perfect itself.

CONTRACT: A mutual agreement between two or more people to do or not to do certain things. A written agreement that can be enforced by law.

CONVEYANCE: Law. A transfer of ownership; the document showing such a transfer; deed.

CORPOREAL HEREDITAMENTS: Substantial, permanent objects which may be inherited. The term land will include all such.

CORPOREAL PROPERTY: In the Common Law, the term to signify property in possession. It differs from incorporeal property, which consists of choses in action and easements, as a right of way, and the like.

CORPUS: The whole body; material substance of anything; a collection of stocks, bonds, etc. forming the principal of a trust fund or estate, as opposed to the interest or income.

COVENANT: In the law of contracts. An agreement, convention, or promise of two or more parties, by deed, in writing, signed, sealed, and delivered, by which either of the parties pledges himself to the other that something is either done or,’shall be done, or stipulates for truth’of certain facts.

In common parlance, any agreement, whether under seal or not.. In effect, this has become the legal meaning in many states, in which private seals have been abolished by statute.

CREATOR: A person who creates something; originator, author, producer, etc. The person who brings a Business Trust Organization into existence.

CREDIT: The ability to borrow, on the opinion conceived by the lender that he will be repaid. A debt due in consequence of a contract of hire or borrowing of money.

CREDITOR: He who has a right to require the fulfillment of an obligation or contract.

DE FACTO: Actually, in fact, in deed. A term used to denote a thing actually done.

DE JURE: Rightfully, of right, lawfully, by legal title. Contrasted with de facto. Of right: Distinguished from de gratia (by favor). By law: Distinguished from de equitable (by equity).

DEBT: In Contracts. A sum of money due by certain and express agreement. All that is due a man under any form of obligation or promise.

DECLARATION OF TRUST: The act by which the person who holds the legal title to property or an estate acknowledges and declares that he holds the same in trust to the use of another person or for certain specified purposes. The name is also used to designate the deed or other writing embodying such a declaration.

DEED: A written instrument under seal, containing a contract or agreement which has been delivered by the party to be bound and accepted by the obligee or covenantee. Any instrument in writing under seal, whether it relates to the conveyance of real estate or to any other matter, as, for instance, a bond, single bill, agreement, or contract of any kind, is as much a deed as is a conveyance of real estate, and after delivery and acceptance, is obligatory.

DELIVERY: In conveyancing. The final and absolute transfer of a deed, properly executed, to the grantee, or to some person for his use, in such manner that it cannot be recalled by the grantor.

DISTRIBUTABLE NET INCOME: The term “distributable net income” means, with respect to any taxable year, the taxable income of the estate or trust computed with the statutory modifications.

DOMICILE    The established, fixed, permanent, or ordinary dwelling-place or place of residence of a person, (whether natural or juristic) as distinguished from his temporary and transient, though actual, place of residence. It is his legal residence, as distinguished from his temporary place of abode; or his home, as distinguished from a place to which business or pleasure may temporarily call him.

DUTY: A human action which is exactly conformable to the laws which require us to obey them. It differs from legal obligation, because a duty cannot always be enforced by the law; it is our duty, for example, to be temperate in eating, but we are under no legal obligation to do so; we ought to love our neighbors, but no law obliges us to love them.

DUTIES: In its most enlarged sense, this word is nearly equivalent to taxes, embracing all impositions or charges levied on persons or things; in its more restrained sense, it is often used as equivalent to customs, or imposts.

EQUITABLE TITLE     A right in the party to whom it belongs to have the legal title transferred to him or the beneficial interest of one person whom equity regards as the real owner, although the legal title is vested in another.

EQUITY: The amount that a property is worth beyond what is owed on it. What is fair and just; a system of rules and principles based on fairness and justice. In the United States, law and equity are usually administered by the same court.

ESTATE: That portion of a person’s wealth not consumed immediately, but rather allowed to accumulate, sometimes in the form of real wealth, but most often in the form of various types of claims on wealth.

EXCISE: An inland imposition, paid sometimes upon the consumption of the commodity, and frequently upon the retail sale.

FACTOR: One whose business is to receive and sell goods for a commission, being intrusted with the possession of the goods to be sold, and usually selling in his own name. A factor differs from a “broker” in that he is intrusted with the possession, management, and control of the goods, (which gives him a special property in them,) while a broker acts as a mere intermediary without control or possession of the property; and further, a factor is authorized to buy and sell in his own name, as well as in that of the principal, which a broker is not.

FACTORIZING PROCESS: In American law. A process by which the effects of a debtor are attached in the hands of a third person.

FEE SIMPLE: An absolute fee which has been paid for the transfer of assets, beyond which no further encumbrances are held, or payments are due. The process of owning property which has been transferred in complete payment without further obligation of any kind. An absolute or fee-simple estate is one in which the owner is entitled to the entire property, with unconditional power of disposition during his life, and descending to his heirs and legal representatives upon his death intestate.

FIDUCIARY: Held in trust; i.e. A fiduciary possessory is legally responsible for what belongs to another. Of a trustee; of trust and confidence: A guardian acts in a fiduciary capacity.

FRANCHISE: A special privilege conferred by government on individuals, and which does not belong to citizens of the country generally by common right.

FRAUD: Law. Any deliberate misrepresentation of the truth or a fact by which a person attempts to persuade another to do something to his disadvantage: Any intent to deceive is proof of fraud.

FRAUDULENT CONVEYANCE: A conveyance or transfer of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach. A conveyance made with intent to avoid some duty or debt due by or incumbent on the person making the transfer.

GOODS: In Contracts. The term applies to inanimate objects and does not include animals or chattels real, as a lease for years of house or land, which chattels does include. In a more limited sense, goods is used for articles of merchandise.

GOODS AND CHATTELS: In Contracts. A term which includes not only personal property in possession, but choses in action and chattels real, as a lease for years of house or land, or emblements (the profits of the land sown).

GRANTOR: A person who makes a grant or conveyance to someone or something.

GRANTOR TRUST: Under this Trust the Grantor(s) (partyfsj transferring property into the Trust for the benefit of specific named beneficiaries) retains so much control over the use or enjoyment of the property transferred that, for tax purposes, he is deemed the owner. This generic term derives from the provisions of §§671 – 678 of the Internal Revenue Code. It is significant mainly in the federal income, estate and gift tax realm. The retention of control by the Grantor of the trust results in imposition of taxes on earnings from the property on his (the Grantor’s) taxable estate and not the taxable estate of the named beneficiaries.

HYPOTHECATE (ASSETS): To pledge (property, stock, etc.) to a creditor as security for a loan or debt without delivering over. To deliver as security for a loan.

IMPOSTS: Taxes, duties or impositions. A duty on imported goods or merchandise. The Constitution of the United States gives congress power “to lay and collect taxes, duties, excises, and imposts,” and prohibits the states from laying “any imposts or duties on exports or imposts” without the consent of congress. U.S. Const. Art. I, Sect. 8, n.l; Art. I, Sect. 10, n.2.

INCUR: To bring a liability upon oneself; to subject oneself to; entail.

INDEMNITY: That which is given to a person to prevent his suffering damages.

INDENTURE: A formal written instrument made between two or more persons in different interests. A deed to which two or more persons are parties, and in which these enter into reciprocal and corresponding grants or obligations towards each other.

INFLATION: The taking of wealth by government through fraud by the issue of legal tender paper currency having little or no real value. A form of hidden tax falling most heavily on those people who produce surplus wealth and attempt to store it in the form of government currency.

INSURABLE INTEREST: Such an interest in a subject of insurance as will entitle the person possessing it to obtain insurance. It is essential to the contract of insurance, as distinguished from a wager policy, that the assured should have a legally recognizable interest in the insured subject, the pecuniary value of which may be appreciated and computed or valued. It is also essential to the contract that the insurer incur a risk in the underwriting venture.

INSURANCE: A contract whereby, for an agreed premium, one party undertakes to indemnify the other against loss on a specified subject by specified perils.


INTEREST: In Contracts. The right of property which a man has in a thing. (See Insurable Interest). On Debts. The compensation which is paid by the borrower of money to the lender for its use, and generally, by a debtor to his creditor in recompense for his detention of the debt.

IRREVOCABLE TRUST: A trust that is not revocable (see REVOCABLE TRUST)

JOINT-TENANCY: A possession of estate by two or more persons in unity and harmony of interest, title, possession and time, under which the survivor takes the entire amount.

JURISDICTION    The authority by which judicial officers take cognizance of and decide

causes. Power to hear and determine a cause. It includes power to enforce the execution of what is decreed.

JURISTIC PERSON: A legal entity created by law rather than by nature, and having many of the same rights, privileges, freedoms, obligations, and responsibilities of a natural person. A corporation or a trust is a juristic person as is a pure trust organization.

LAND: In the most general sense, “land” comprehends any ground, soil, or earth whatsoever. In its more limited sense, the term denotes the quantity and character of the interest or estate which the tenant may own in land.- The term “lands” designates all real estate and the term “land” may include anything that may be classed as real estate or real property.

LAND GRANT: A donation of public lands to a subordinate government, a corporation, or an individual; as from the United States to a state, or to a railroad company to aid in the construction of its roads.

LEASE: A species of contract for the possession and profits of lands and tenements either for life or for a certain term of years, or during the pleasure of the parties, which gives rise to the relationship of landlord and tenant. One of its essential properties is, that its duration must be for a shorter period than the duration of the interest of the lessor in the land; for if he disposes of his entire interest it becomes an assignment, and is not a lease. In other words, the granting of a lease always supposes that the grantor reserves to himself a reversion in the leased premises. The party who leases is called the lessor, he to whom the lease is made the lessee, and the compensation or consideration of the lease is the rent. The words lease and demise are frequently used to signify the estate or interest conveyed; but they properly apply to the instrument of conveyance.

LEGAL TITLE: One cognizable or enforceable in a court of law, or one which is complete and perfect so far as regards the apparent right of ownership and possession, but which carries., no beneficial interest in the property, another person being equitably entitled thereto; in either case, the antithesis of “equitable title.”

LIABILITY: The state of being under obligation; the debt or other financial obligation of a business, for money, goods, services, etc., received.

LIQUIDATION: (Of a trust or business) To Pay the debts of; to settle the accounts of (as in business); to dissolve the trust and discharge the assets for final distribution.

MALFEASANCE: Official misconduct; violation of a trust or duty.

MANDATE: A contract by which one party gives to another party power and authority to act in their behalf in a prescribed manner.

MORTGAGE: The conveyance of an estate or property by way of pledge for the security of debt, and to become void on payment of it. An estate created by a conveyance absolute in its form, but intended to secure the performance of some act, such as the payment of money, and the like, by the grantor or some other person, and to become void if the act is performed agreeably to the terms prescribed at the time of making such conveyance. Both real and personal property may be mortgaged, and in substantially the same manner, except that a mortgage being in its nature a transfer of title, the laws representing the necessity of possession of personal property and the nature of instruments of transfer being different, require the transfer to be made differently in the two cases. The foregoing definitions are applicable to the common-law conception of a mortgage. But in many states in modern times, it is regarded as a mere lien, and not as creating a title or estate. It is a pledge or security of particular property for the payment of a debt or the performance of some other obligation, whatever form the transaction may take, but is not now regarded as a conveyance in effect, though it may be cast in the form of a conveyance.

NATURAL PERSON: As in contrast to juristic person – a natural person is a man, woman or child.

NATURE: From the Latin nasci, be born. The essential quality of a thing, essence.

NON-NEGOTIABLE: Not able to transfer or pass; not able to sell.

NON-ASSESSABLE: Not able to determine the value of; not subject to assessment.

OBLIGATION: A duty. A tie which binds us to pay or do something agreeably to the laws and customs of the country in which the obligation is made. Express or conventional obligations are those which the obligor binds himself in express terms to perform the obligation is one which arises by operation of law.

OFFER: An offer, as an element of a contract, is a proposal to make a contract. It must be made by the person who is to make the promise, and it must be made to the person to whom the promise is made. It may be made either by words or by signs, either orally or in writing, and either personally or by a messenger; but in whatever way it is made, it is not in law an offer until it comes to the knowledge of the person to whom it is made.

PERPETUAL   Never ceasing; continuous; enduring; lasting; unlimited in respect of time;

continuing without intermission or interval.

PERPETUITY: Any limitation or condition which may take away or suspend the power of alienation, or take the subject of it out of commerce, for a period beyond the life or lives in being and 21 years thereafter.

PLEDGE: In the law of bailment. A bailment of goods to a creditor as security for some debt or engagement. A bailment or delivery of goods by a debtor to his creditor, to be kept till the debt be discharged.

The necessary elements to constitute a contract one of “pledge” are: Possession of the pledged property must pass from the pledgor to the pledgee; the legal title to the property must remain in the pledgor; and the pledgee must have a lien on the property for the payment of a debt or the performance of an obligation due him by the pledgor or some other person.

PROMISE: An engagement by which the promisor contracts towards another to perform or to do something in the advantage of the latter. When a promise is made, all that is said at the time in relation to it must be considered; if, therefore, a man promises to pay all he owes, accompanied by a denial that he owes any thing, no action will lie to enforce such a promise. And when the promise is conditional, the condition must be performed before it becomes of binding force.

PROMISSORY NOTE: A written promise to pay a certain sum of money, at a future time, unconditionally. By the Uniform Negotiable Instruments Act, a negotiable promissory note is defined as an unconditional promise in writing made by one person to another signed by the maker engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer. Where a note is drawn to the maker’s own order, it is not complete until endorsed by him. Although a promissory note, in its original shape, bears no resemblance to a bill of exchange, yet when indorsed, it is exactly similar to one; for then it is an order by the indorser of the note upon the maker to pay the indorsee. The indorser is as it were the drawer; the maker, the acceptor; and the indorsee, the payee. Most of the rules applicable to bills of exchange equally affect promissory notes. No particular form is requisite to these instruments: a promise to deliver the money, or be accountable for it, or that the payee shall have it, is sufficient. There are two principal qualities essential to the validity of a note: First, that it be payable to all events, not dependent on any contingency, nor payable out of any particular fund. Second, it is required that it be for the payment of money only, and not in bank-notes; though it has been held differently in the state of New York. A promissory note payable to order or bearer passes by indorsement, and, although a chose in action, the holder may bring suit on it in his own name. Although a simple contract, a sufficient consideration is implied from the nature of the instrument.

PROPERTY: That which is peculiar or proper to any person; that which belongs exclusively to one. In the strict sense, an aggregate of rights which are guaranteed and protected by the law. The term is said to extend to every species of valuable right and interest. More specifically, ownership; the unrestricted and exclusive right.-to a thing; the right to dispose of a thing in every legal way, to possess it, to use it, and to exclude everyone else from interfering with it. The highest right a man can have to anything; being used to refer to that right which one has to lands or tenements, goods or chattels, which no way depends on another man’s courtesy.

PROTECTOR: The duties of the protector of a trust are to ensure that the trustee acts in the best interests of the beneficiary. He may act as counsel to the trustee and generally has the power to replace the trustee at will.

PURE TRUST: A term often used to refer to a trust brought into existence pursuant to the common law right of contract. These contractually created entities are generally formed through the utilization of two basic documents. The first document is the Declaration of Trust under which a Trustee receives property, from a Creator or Grantor and contractually obligates himself, upon receipt of the property, to manage the property. The second document is the Trust Indenture. The Trustee accepting the property and undertaking to manage this corpus is contractually bound to follow, strictly, the specific terms of the Trust Indenture in Carrying out his duties. Thus, the documents creating the Trust impose contractual obligations on the trustee to act as fiduciary with respect to the property and funds placed in his hands, initially by the Creator or Grantor.

QUITCLAIM DEED: A deed of conveyance operating by way of release; that is, intended to pass any title, interest, or claim which the grantor may have in the premises, but not professing that such title is valid, nor containing any warranty or covenants for title.

QUORUM: The number of members of any assembly (or body) that must be present if the business done is to be legal or binding. More than one half the membership usually constitutes a quorum if no special rule exists.

RESIGNATION: A written statement giving that one resigns.

REVERSION: A return to a former condition; the return of property to the grantor or his heirs. An estate returning to the person who granted it or his heirs.

REVOCABLE TRUST: The general rule is that a trust is revocable where at any time the power to revest title of property conveyed into trust is exercisable by the grantor or a non-adverse party, or both. A revocable trust is transparent for income tax purposes under the Internal Revenue Code, since the grantor is treated as l.he owner. When a trust is revocable, there is no reason why the grantor should not also be trustee, since the tax consequences are already settled by the revocability of the trust.

RIGHT: A well-founded claim. The ideas of claim and that the claim must be well-founded always constitute the idea of right. If these claims inhere in the very nature of man himself, they are called inherent, inalienable rights. Right and obligation are correlative ideas. The idea of a well-founded claim becomes in law a claim founded in or established by the law; so that it is said that a right in law is an acknowledged claim. Thus, at law, no right is brought into existence until a well-founded claim is made in a proper and timely manner.

SECURITY:    Protection; assurance; indemnification. The term is usually applied to an obligation, pledge, mortgage, deposit, lien, etc.,, given by a debtor in order to make sure the payment or performance of his debt, by furnishing the creditor with a resource to be used in case of failure in the principal obligation.

SETTLOR: Law. A person who settles property on someone, or creates a trust of property.

STANDARD OF LIVING: Subjective evaluation of the relationship between the total amount of goods consumed and the total needs and desires.

SUCCESSOR: A person who follows or succeeds another in office, position or ownership of property. A person or thing that comes next ‘after another in a series.

TAX HAVEN   The IRS Agents Handbook defines tax haven as “a term that generally connotes any foreign country that has either a very low tax or no tax at all on certain categories of income. However, as the IRS uses the term, it refers to the use of certain foreign countries by U.S. taxpayers in order to avoid federal income tax.”

TAXES:   The taking of wealth by government, either by force or intimidation, from the productive people within its political jurisdiction. People who produce no wealth cannot be subject to the extraction of taxes. (See “THEFT’)

TENANTS IN COMMON: Those who hold property,, or lands in common.

TENURE: Holding; possessing. Length of time of holding or ‘possessing; terms; conditions, etc. on which anything is held or occupied.

TESTATOR: A person who makes a will. A person who has died leaving a valid will.

THEFT: The taking of the property (wealth) of another without his consent and with the intent to deprive him of it. May be accomplished by force, intimidation, fraud or any combination of these. Wealth must have been created before it can be stolen. (See “TAXES”)

TITLE: The means whereby the owner of lands comes into legal possession of his property. The union of all the elements which constitute ownership. The right to or ownership in lands; also the evidence of such ownership. A perfect title requires the union of possession and the right to the thing possessed.

TORT: A legal wrong committed upon the person or property independent of contract. It may be either (1) a direct invasion of some legal right of the individual; (2) the infraction of some public duty by which special damage accrues to the individual; (3) the violation of some private obligation by which like damage accrues to the individual. Three elements of every tort action are: Existence of legal duty from defendant to plaintiff, breach of duty, and damage as proximate result.

TRANSFER: To convey or remove from one person or place to another; hand over.

TRUST: In General: A right of property real or personal, held by one party for the benefit of another – by trust agreement.

Complex Trust: A trust in wilich the trustees have the discretion to distribute any, all, or any portion, of the trust income to the beneficiaries in any year.

Inter vivos Trust: A trust which goes into effect during the grantor’s life.

Irrevocable Trust: A trust in which the trustor does not retain the power to revoke the trust agreement, or in which he can do so only after a ten year period.

Simple Trust: A trust which is required by its Indenture to distribute all the income in any year to the beneficiaries.

Revocable Trust: A trust in which the trustor retains the power to revoke the trust agreement and have the assets returned to him or other designated individuals within ten years.

Testamentary Trust: A,trust which does not take effect until after the grantor’s death.

TRUSTEE: A person or one of a group of persons appointed to manage the affairs of an individual, institution, business, etc. A person who holds property in trust for another.

TRUSTOR: One who creates a trust. Also called settlor.

TRUST DEED:     A species of mortgage given to a trustee for the purpose of securing a numerous class of creditors, as the bondholders Of a railroad corporation, with power to foreclose and sell on failure of the payment of their bonds, notes, or other claims. In some states, and in the District of Columbia, a trust deed or deed of trust is a security resembling a mortgage, being a conveyance of lands to trustees to secure the payment of a debt, with a power of sale upon default, and upon a trust to apply the net proceeds to paying the debt and to turn over the surplus to the grantor. A “trust deed” on real estate as security for a bond issue is, in effect, a mortgage on property executed by the mortgagor to a third person as trustee to hold as security foT^e mortgage debt as evidenced by the bonds, for the benefit of the purchasers of the bonds as lenders.

VESTED INTEREST: An estate is vested in interest when there is a: present fixed right of future enjoyment.

WARRANTY: A promise that a proposition of fact is true.

Real Property Law: A real covenant by the grantor of lands, for himself and his heirs, to warrant and defend the title and possession of the estate granted, to the grantee and his heirs, whereby, either upon voucher, or judgment and the eviction of the grantee by paramount title, the grantor was bound to recompense him with other lands of equal value.

Contracts: An undertaking or stipulation, in writing, or verbally, that a certain fact in relation to the subject of a contract is or shall be as it is stated or promised to be. An express or implied statement of something undertaken as part of contract but collateral to its object. A warranty differs from a representation in that a warranty must always be given contemporaneously with, and as part of, the contract; whereas a representation proceeds and induces to the contract. And, while that is their difference in nature, their difference in consequence or effect is this: that, upon breach of warranty, (or false warranty), the contract remains binding, and damages only are recoverable for the breach; whereas, upon a false representation, the defrauded party may elect to avoid the contract and recover the entire price paid.

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