Naked Trust

A straightforward type of trust into which a trustor transfers assets (money or property) in order to pass them on to beneficiaries. The initial owner of the assets (the trustor) loses all control over them once they are placed in the trust. The trustee has only nominal control of the assets in the trust. The trust's beneficiary has absolute entitlement to the assets once he or she turns 18.

Also known as a "bare trust," "dry trust" or "passive trust."

This estate-planning tool is commonly used by parents or grandparents to transfer assets to children or grandchildren. The college financial-aid implications of putting money into a naked trust for children should be considered before establishing the trust.


Investment dictionary. . 2012.

Look at other dictionaries:

  • naked trust — see trust Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • naked trust — Same as dry trust …   Ballentine's law dictionary

  • naked trust — noun : passive trust …   Useful english dictionary

  • trust — n 1 a: a fiduciary relationship in which one party holds legal title to another s property for the benefit of a party who holds equitable title to the property b: an entity resulting from the establishment of such a relationship see also… …   Law dictionary

  • trust — A legal entity created by a grantor for the benefit of designated beneficiaries under the laws of the state and the valid trust instrument. The trustee holds a fiduciary responsibility to manage the trust s corpus assets and income for the… …   Black's law dictionary

  • naked — Bare; wanting in necessary conditions; incomplete, as a naked contract (nudum pactum), i.e., a contract devoid of consideration, and therefore invalid; or, simple, unilateral, comprising but a single element, as a naked authority, i.e., one which …   Black's law dictionary

  • naked land trust — see trust Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • Naked Gun 33⅓: The Final Insult — Theatrical release poster Directed by Peter Segal Produced by …   Wikipedia

  • Naked short selling — Schematic representation of naked short selling in two steps. The short seller sells shares without owning them. He then purchases and delivers the shares for a different market price. If the short seller cannot afford the shares in the second… …   Wikipedia

  • naked power — A power of disposal accompanied by no interest or estate in the donee of the power. 41 Am J1st Pow § 5. A power of sale in a mortgage or deed of trust, accompanied by no interest, which can be executed only by the person designated. 37 Am J1st… …   Ballentine's law dictionary


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