Passive Trust

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Passive Trust

Definition

A trust under which the trustee has no active duties or discretion but merely holds title for the benefit of the beneficiary. In many states, a passive trust results in legal title to the trust assets passing directly to the beneficiary rather than remaining with the trustee, often pursuant to the state’s statute of uses, and fails. A passive trust contrasts with an active trust.

Related rules

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— Clement v. Charlotte Hospital Ass'n, Inc.

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— Schwarzkopf v. American Heart Ass'n of Greater Miami, Inc.

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