Back-Up Trust

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Back-Up Trust

Back-Up Trust (pronounced: /ˈbakˌəp trəst/) is a legal term used in the field of Estate Planning and Trust Law.

Etymology

The term "Back-Up Trust" is derived from the English words "back-up", meaning a reserve or substitute, and "trust", a legal arrangement in which one person (the Trustee) holds property for the benefit of another (the Beneficiary).

Definition

A Back-Up Trust is a secondary or contingent trust that comes into effect only if the primary trust fails or is unable to fulfill its purpose. This type of trust is often used in Estate Planning to ensure that assets are properly managed and distributed in the event of unforeseen circumstances.

Related Terms

  • Trustee: A person or organization that holds or manages assets for the benefit of another.
  • Beneficiary: A person or organization that benefits from a trust.
  • Estate Planning: The process of arranging for the disposal of an individual's estate during their life.
  • Trust Law: The body of law governing trusts and similar legal entities.
  • Primary Trust: The main trust in an estate plan, which usually holds the majority of the assets.
  • Contingent Trust: A trust that only comes into effect under certain conditions.

External links

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