Featured Academy
Understand how trusts and investing work together.
Private Trusts Holding Investments
A private trust may own securities, real estate, or private business interests. The trustee manages them under the trust instrument and fiduciary standards such as the prudent investor rule where adopted.
Investment Trust Companies
In the United Kingdom, an 'investment trust' is typically a closed-ended company listed on a stock exchange that pools investor capital. Shareholders buy shares, which may trade at a premium or discount to net asset value.
Real Estate Investment Trusts (REITs)
REITs own or finance income-producing real estate. In the U.S., qualifying REITs must meet asset, income, and distribution requirements and are subject to securities regulation when offered to investors.
Unit Trusts
Pooled arrangements in which investors hold units representing beneficial interests in a portfolio. Common in the UK, Australia, and parts of Asia, and generally regulated as collective investment schemes.
Statutory Trust Investment Structures
Structures such as Delaware statutory trusts (DSTs) are used for fractional real estate ownership and funds. Legal and tax treatment — including any exchange eligibility — depends on the specific arrangement.
Private Investment Holding Trusts
A private trust may hold an investment portfolio for designated beneficiaries, subject to fiduciary duties, tax rules, and — if interests are offered to others — securities regulations.
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Investment Trust vs. Business Trust
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Trust investment allocation illustration
Total: 100%
Illustration only; not a recommended allocation.
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Beneficiary distribution simulator
Total annual
$40,000
Per beneficiary
$13,333
Ignores taxes, fees, returns, and trust terms. Educational illustration only.
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Trustee responsibility simulator
A beneficiary asks the trustee to put the entire portfolio into one speculative stock.
The trustee reviews the portfolio annually and documents the rationale for changes.
The trustee buys a property from her own brother at above-market price.
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Risk & compliance checklist
0 of 7 reviewed
Glossary
- Settlor / Grantor
- The person who creates and typically funds a trust.
- Trustee
- The person or institution holding legal title and managing trust property under fiduciary duties.
- Beneficiary
- A person or entity entitled to benefit from the trust.
- Trust Protector
- A party given specific powers, such as removing trustees or amending administrative terms.
- Corpus / Principal
- The property held in the trust.
- Prudent Investor Rule
- A standard requiring trustees to invest as a prudent investor would, considering the portfolio as a whole.
- NAV
- Net asset value — total assets minus liabilities, often stated per unit or share.
- Distribution
- A payment of income or principal from the trust to a beneficiary.
- Funding
- Transferring assets into the name of the trust or trustee.
- Fiduciary
- A person legally obligated to act in another's best interest.
Investments involve risk, including loss of principal, illiquidity, and costs. Investment products may be regulated separately from private trusts. Educational content only. Not legal, tax, or investment advice. Trust law differs by jurisdiction. Consult qualified professionals before acting.