What is a voluntary trust?
Known sometimes as an inter vivos trust, a voluntary trust is a living trust established throughout the trustor’s lifetime. In a voluntary trust, even though the beneficiary has accurate title, possession, and authority to carry out trust activities, the trustor still has the legal title to the gift delivered to them. A duty resulting from personal confidence in and freely accepted by one person for the benefit of another is another definition of voluntary trust. On the other hand, a law establishes an involuntary trust.
Knowledge of Voluntary Trusts
In estate planning, voluntary trusts are often used. Regarding real estate, the person in charge is called the trustee, and the person who will eventually inherit the property is called the trustor. The term “res” refers to the actual property.
There is no consideration in a voluntary trust. A voluntary trust is one in which the beneficiary accepts the trust as a pure gift and makes no contributions in return. Voluntary trusts are distinct from trusts for value, established in the interest of buyers and mortgagees by not accepting anything in return. An involuntary trust is the reverse of a voluntary trust and may be further subdivided into resultant or constructive trusts.
In some situations, voluntary trust may also mean mutual trust between two people about a commitment to act in the other’s or one person’s best interests. On the other hand, a voluntary trust is, legally speaking, a formal structural arrangement that may supervise the operations and, in some situations, the financial aspects of an organization.
A Voluntary Trust Example
Numerous service and philanthropic organizations rely on donations to sustain their daily operations. The United Nations Alliance of Civilizations Trust Fund illustrates the operation of a voluntary trust. The organization’s high-level group suggested in a special report that the Alliance create an optional trust fund. According to the organization’s website, the Trust Fund’s primary goals are to support the Alliance of Civilizations’ projects and initiatives, the High Representative’s official activities and outreach programs, and essential operational and human resource needs.
