passive trust
- noun
- /ˈpæsɪv trʌst/
- Formal
:
fideicomiso pasivo
- In a passive trust, the trustee simply holds the assets for the benefit of another person.
Examples
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The court determined that the arrangement constituted a passive trust rather than an active trust.
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A passive trust requires minimal involvement from the trustee.
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Modern law sometimes prohibits the creation of a passive trust without any duties imposed on the trustee.
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Many investors prefer a passive trust for its simplicity.
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In a passive trust, the trustee simply holds the assets for the benefit of another person.
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Modern law sometimes prohibits the creation of a passive trust without any duties imposed on the trustee.
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Many investors prefer a passive trust because it requires little management and is easy to maintain.
Antonyms
- Formal
A way of holding property where the person in charge must manage it and act for the people who benefit
How Active
Surface Forms
Morphology
The adjective 'passive' (inactive) directly modifies 'trust' (a legal arrangement), so a learner who knows both words can infer it denotes a trust characterized by inactivity of the trustee. The compound follows a straightforward adjective+noun composition common across languages, so the core meaning is derivable even if legal details require specialist knowledge.
Etymology
Passive trust comes from a simple image: a person who only holds a box and does nothing else. Because the person is passive, meaning not active, and the trust is simply holding property for someone else, the phrase describes 'a trust' where the 'trustee' has no duties and only keeps the assets for the 'beneficiary'.