Glossary of trust terms

Appointor

The person who has the power to appoint or remove trustees and appointors.

Beneficiary

A person or entity who receives a benefit from a trust.

Contact Trustee

This is not a legal term but describes the trustee responsible for the coordination of various arrangements on behalf of a trust administered by Trustworks

Counterpart Document

A document signed by one party where other parties sign their own copy of that document and all signed copies are deemed to be a valid and binding document.

Digital Signature

A process where documents can be validly signed by electronic means.

Discretionary Beneficiary

A beneficiary who only receives a benefit from a trust where the trustees exercise their discretion to confer such benefit on the beneficiary.

Discretionary Trust

A trust that does not provide for fixed entitlements of the beneficiaries but leaves beneficiary entitlements to the discretion of the trustees.

Family Trust

A trust, usually a discretionary trust, established for the benefit of a family group.

Gifting

The transfer of asset without consideration

Memorandum of Wishes (also called Letter of Wishes)

A document prepared by the Settlor establishing their wishes in respect of the administration of a trust.  This document usually belongs to the trustees personally and not the trust.

Minute

A document recording the operation or administration of a trust.

Minute Book

The collection of minutes resolutions

Perpetuity Period

The maximum term of the trust.  This is governed by the “rule against perpetuities” which provides that a trust cannot last forever.  The Perpetuities Act 1964 provides a term of 80 years.

Resettlement

A process pursuant to the trust deed where the trustees establish a new trust for the benefit of a beneficiary or beneficiaries of the existing trust.

Resolution

The record of a trustee decision.

Settlor

The person who establishes a trust.

Trading Trust

A trust used for the purposes of undertaking commercial activities.

Trust

An arrangement in which property is held and managed by a person, people or an entity for the benefit of others.

Trust Deed

The document or documents that set and establish the terms of the trust.

Trustee

A person or entity who holds property for the benefit of the beneficiaries.

Vesting

The transfer of the trust assets to a beneficiary or beneficiaries in accordance with the trust deed.

Vesting Date

The date the trust comes to an end and the trust assets are required to be vested.