Definitions of Terms

commonly used in

Unincorporated Business Organizations and Trusts

Acceptance: An agreeing, either expressly or by conduct,

to the act or offer of another so that a contract is
concluded and the parties become bound by that
contract.

Acknowledgment: A declaration or avowal of one’s act or

a fact to give it legal validity; specifically, a declaration
before a duly qualified public officer by one who has
executed an instrument, that the execution was his (free)
act and deed.

Active Trust: A trust where the trustees have actual,

active duties, such as to preserve and increase the trust
estate, as opposed to a “passive trust”, where the
trustees merely hold title.

Adverse Party: Anyone who serves upon a decision

making board and has a personal interest in the results
which may be in conflict with the self interest of the other
members of the board or interested parties in the
organization. With regard to the Business Trust
Organization, it is a trustee whose position of self interest
is in opposition to that of the other trustees, especially if
one of the other trustees was also the Creator. This
opposition or adversity of self interest is recognized
through the holding of greater portions of beneficial
interest.
Arms Length: Black’s Law Dictionary 5th ed. .... relates to
transactions wherein a trustee, acting for himself and also
as trustee, a relating which demands strict fidelity to
others, seeks to consummate a deal wherein self-interest
is opposed to duty. Arms’s length is “The standard under
which unrelated parties, each acting in his or her own
best interest, would carry out a transaction.” In all
transactions, you must be sure that the fiduciary duty to
the capital unit holders is not overridden by self-interest,
that the form and substance of transactions are mutually
supportive.

Assets: The word has come to signify everything which

can be made available for the payment of debts; and is
always used when we speak of the means which a party
has, as compared with his liabilities or debts. All the stock
in trade, cash, and all available property belonging to a
merchant or company.

Assignment: In Contracts. A transfer or making over to

another of the whole of any property, real or personal, in
possession or in action, or of any estate or right therein.
Every demand connected with a right of property, real or
personal, is assignable. To make an assignment valid at
law, the subject of it must have an existence, actual or
potential, at the time of the assignment. The proper
technical and operative words in assignment are “assign,
transfer, and set over,” but “give, grant bargain, and sell”
or any other words which show the intent of the parties to
make a complete transfer, will work an assignment. Since
an assignment is the relinquishment or transfer of a
valuable right from one person to another, it is subject to
many of the legal requirements of Deeds and Bills of Sale.
Under an assignment, the assignee obtains only those
property rights that the assignor had and nothing more.

Beneficial Interest: Profit, benefit, or advantage resulting

from a contract, or the ownership of an estate as distinct
from the legal ownership or control. A cestui que trust has
the beneficial interest in a trust estate while the trustee
has the legal estate.

Beneficiary: One who benefits from act of another. One

for whose benefit a trust exists. A person who receives, or
is named to receive, money or property from a trust.

Business Trust Organization: An unincorporated

organization created and managed by “trustees" for the
benefit and profit of persons who hold or many acquire
transferable certificates. Similar to stock certificates of a
corporation, trust certificates provide individual holders
evidence of interest in a trust estate. A business Trust
Organization or Unincorporated Business Organization
often is called a “common-law trust” but this phrase is
not descriptive of any of the peculiar characteristics of
such organizations. The basis for the terminology
“common-law trust" is that they are created under the
common law of contract (Article 1 Section 10 of the
Constitution) and do not depend upon any statute.

Capital Units: The beneficial interests in a Business Trust

Organization are divided into Capital Units, evidenced by
certificates, conveying to the holder the limited rights to
receive their pro-rata share of any distributions of income
of assets that may be made by the trustees.

Civil Law: This term is generally used to designate the

Roman jurisprudence, or Roman Civil Law. In its most
extensive sense, the term Roman Law comprises all those
legal rules and principles which were in force among the
Romans, without reference to the time when they were
adopted. But in a more restricted sense we understand it
to be the law complied under the auspices of the Emperor
Justinian. This system of law is the antithesis of the
Common Law in that its fundamental premise is that
sovereignty resides in a ruler, or ruling body; whereas the
fundamental premise of the Common Law is that
sovereignty resides in the individual, and in the people as
a whole. The influence upon (and, indeed, the usurpation
of) principles, practices and usage’s of the Common Law
System in the United States by Roman Civil Law
jurisprudence cannot be denied by the impartial inquirer.

Collateral: That which is by the side, and not the direct

line; that which is additional to or beyond a thing.

Common Law: The conscience of man derived from

usages and customs of immemorial antiquity. It comprises
the body of principles and rules of action, relating to the
government and security of persons and property. It is in
essence the golden rule. Its science is the science of
living honestly with one’s self and with other individuals.
It is the coalescing of the two great powers bestowed
upon man by his creator -- the power to reason and the
power of the spirit, working together in harmony with the
laws of God and nature. It is loyalty-to-self, loyalty-to-
truth, as revealed to each individual through his
conscience. Being the Law of Conscience, common law
cannot be written, it can only be written about. All that
can be written about the Common Law is how it manifests
itself through the individual who is loyal to self -- loyal to
his conscience. It is frequently said that in Common Law
are the judgments and decrees of courts recognizing
these usages and customs, that Common Law is the
statutory and case law background of England and the
American Colonies.

Common Law System: A system devised by man for the

sole purposes of creating a forum in which the Common
Law, the Law of Conscience, can flourish and function in
the resolution of controversies, and in the determination
and application of justice. The heart of this Common Law
law system is a Common Law jury of twelve randomly
selected form the community in order to maximize the
probability that, by each individual juror being loyal to his
own conscience, the jury will represent the conscience of
the community as a whole. Any system, or the aspect of a
system that suspends or interferes with the reasoning
power and conscience of a juror is not a common law
system, or any part thereof.

Contract:
Unilateral: A Contract in which one party makes an
express engagement or undertakes a performance,
without receiving in return any express engagement or
promise of performance from the other.

Bi-lateral: A mutual engagement between two or

more parties entered into for mutual engagements such
as sale or hire.

Corpus: The main body or principle of the trust. “The trust

property”.
Covenant: In the law of contracts: An agreement,
convention, or promise of two or more parties, by deed, in
writing, signed sealed, and delivered, by which either of
the parties pledges himself to the other that something is
either done or shall be done, or stipulates for truth of
certain facts.

In common parlance, any agreement, whether under seal

or not. In effect, this has become the legal meaning in
many states, in which private seals have been abolished
by statute.

Consideration: Law. Something given or done as a return

for something given or done by another, without which no
contract is binding. The acts or promises that serve as the
basis of the bargain on both sides

Constructive: That which amounts in view of the law to

an act, although the act itself is not really performed.

Consummate: To complete; realize, fulfill or perfect itself.

Contract: A mutual agreement between two or more

people to do or not to do certain things. A written
agreement that can be enforced by law.

Conveyance: Law. A transfer of ownership; the document

showing such a transfer; deed.

Corporeal Hereditaments: Substantial, permanent objects

that may be inherited. The term land will include all such.

Corporeal Property: In the Common Law, the term to

signify property in possession. It differs from incorporeal
property, which consists of choices in action and
easements, as a right of way, and the like.
Corpus: The whole body; material substance of anything;
a collection of stocks, bonds, etc., forming the principal of
a trust fund or estate, as opposed to the interest or
income.

Creator: A person who creates something; originator,

author, producer, etc. The person who brings a Business
Trust Organization into existence.
Credit: The ability to borrow, on the opinion conceived by
the lender that he will be repaid. A debt due in
consequence of a contract of hire or borrowing of money.

Creditor: He who has a right to require the fulfillment of

an obligation or contract.

De Facto: Actually, in fact, in deed. A term used to

denote a thing actually done but may be without basis in
law.

De Jure: Rightfully, of right, lawfully, by legal title;

Contrasted with de facto; Of right: Distinguished from de
gratia (by favor). By law: Distinguished from de equitable
(by equity).

Debt: In contracts. A sum of money due by certain and

express agreement. All that is due a man under any form
of obligation or promise.

Declaration or Trust: The act by which the person who

holds the legal title to property or an estate
acknowledges and declares that he holds the same in
trust to the use of another person or for certain specified
purposes. The name is also used to designate the deed or
other writing embodying such a declaration.
Deed: A written instrument under seal, containing a
contract or agreement that has been delivered by the
party to be bound and accepted by the obligee or
covenantee. Any instrument in writing under seal,
whether it relates to the conveyance of real estate or to
any other matter, as, for instance, a bond, single bill,
agreement, or contract of any kind, is as much a deed as
is a conveyance of real estate, and after delivery and
acceptance, is obligatory.

Delivery: In conveyancing; The final and absolute

transfer of a deed, properly executed, to the grantee, or
to some person for his use, in such manner that it cannot
be recalled by the grantor.

Distributable Net Income: The term “distributable net

income” means, in any taxable year, the taxable income
of the estate or trust computed with the statutory
modifications.

Domicile: The established, fixed, permanent, or ordinary

dwelling place or place of residence of a person, (whether
natural or juristic) as distinguished from his temporary
and transient, though actual, place of residence. It is his
legal residence, as distinguished from his temporary
place of abode; or his home, as distinguished from a
place to which business or pleasure may temporarily call
him.

Donor: The party conferring a power. One who makes a

gift. One who creates a trust.

Duty: A human action which is exactly conformable to the

laws which require us to obey them. It differs from legal
obligation, because a duty cannot always be enforced by
the law; it is our duty, for example, to be temperate in
eating, but we are under no legal obligation to do so; we
ought to love our neighbors, but no law obliges us to love
them.

Duties: In its most enlarged sense, this word is nearly

equivalent to taxes, embracing all impositions or charges
levied on persons or things; in its more retrained sense, it
is often used as equivalent to customs, or imposts.

Equitable Title: A right in the party to whom it belongs to

have the legal title transferred to him or the beneficial
interest of one person whom equity regards as the real
owner, although the legal title is vested in another.

Equity: The amount that a property is worth beyond what

is owed on it. What is fair and just; a system of rules and
principles based on fairness and justice. In the United
States, law and equity are usually administered by the
same court.

Estate: The degree, quantity, nature, and extent of

interest which a person has in real and personal property.
Under Common Law, a person's interest maybe absolute
or qualified.

Excise: An inland imposition, paid sometimes upon the

consumption of the commodity, and frequently upon the
retail sale.

Factor: One whose business is to receive and sell goods

for a commission, being intrusted with the possession of
the goods to be sold, and usually selling in his own name.
A factor differs from a “broker” in that he is intrusted with
the possession, management, and control of the goods,
which gives him a special property in them, while a
broker acts as a mere intermediary without control or
possession of the property; and further, a factor is
authorized to buy and sell in his own name, as well as in
that of the principals, which a broker is not.

Factoring Process: In American law: A process by which

the effects of a debtor are attached in the hands of a
third person.

Fee Simple: An absolute fee which has been paid for the
transfer of assets, beyond which no further
encumbrances are held, or payments are due. The
process of owning property that has been transferred in
complete payment without further obligation of any kind.
An absolute or fee-simple estate is one in which the
owner is entitled to the entire property, with
unconditional power of disposition during his life, and
descending to his heirs and legal representatives upon his
death intestate.

Fiduciary: Held in trust; i.e., a fiduciary possessor is

legally responsible for what belongs to another. Of a
trustee; of trust and confidence: A guardian acts in a
fiduciary capacity.

Franchise: A special privilege conferred by government on

individuals, and which does not belong to citizens of the
country generally by common right.

Fraud: Law. Any deliberate misrepresentation of the truth

or a fact by which a person attempts to persuade another
to do something to his disadvantage: Any intent to
deceive is proof of fraud.

Fraudulent Conveyance: A conveyance or transfer of

property, the object of which is to defraud a creditor, or
hinder or delay him, or to put such property beyond his
reach. A conveyance made with intent to avoid some
duty or debt due by or incumbent on the person making
the transfer.

Goods: In Contracts. The term applies to inanimate

objects and does not include animals or chattels real, as a
lease for years of house or land, which chattels do
include. In a more limited sense, goods is used for articles
of merchandise.

Goods and Chattels: In Contracts. A term which includes

not only personal property in possession, but chooses in
action and chattels real, as a lease for years of house or
land, or amblements (the profits of the land sown).

Grantor: The person by whom a grant is made; A

transferor of property; The creator of a trust is usually
designated as the grantor of the trust. Hence is called a
grantor trust.

Grantor Trust: Under this Trust the Grantor(s) (party[s]

transferring property into the Trust for the benefit of
specific named beneficiaries) retains so much control
over the use or enjoyment of the property transferred
that, for tax purposes, he is deemed the owner. This
generic term derives from the provisions of Section §671-
678 of the IRC. It is significant mainly in the federal
income, estate and gift tax realm. The retention of control
by the Grantor of the trust results in imposition of taxes
on earnings from the property on his (the Grantor’s)
taxable estate and not the taxable estate of the named
beneficiaries.

Hypothecate (Assets): To pledge (property, stock, etc.) to

a creditor as security for a loan or debt without delivering
over. To deliver as security for a loan.

Imposts: Taxes, duties or impositions. A duty on imported

goods or merchandise. The Constitution of the United
States gives congress power “to lay and collect taxes,
duties, excises, and imposts,” and prohibits the states
from laying “any imposts or duties on exports or imposts”
without the consent of congress.
U. S. Const. Art. 1, Sect. 8, n. 1; Art. 1, Sect. 10, n. 2.

Incur: To bring a liability upon oneself; to subject oneself

to; entail.

Indemnity: That which is given to a person to prevent his

suffering damages.

Indenture trustee: Person or institution named in a trust

indenture and charged with holding legal title to property
and with carrying out the terms of the indenture.

Indenture: A formal written instrument made between

two or more persons in different interests. A deed to
which two or more persons are parties, and in which
these enter into reciprocal and corresponding grants or
obligations towards each other.
Inflation: The taking of wealth by government through
fraud by the issue of legal tender paper currency having
little or no real value. A form of hidden tax falling most
heavily on those people who produce surplus wealth and
attempt to store it in the form of government currency

Insurable Interest: Such an interest in a subject of

insurance as will entitle the person possessing it to obtain
insurance. It is essential to the contract of insurance, as
distinguished from a wager policy, that the assured
should have a legally recognizable interest in the insured
subject, the pecuniary value of which may be appreciated
and computed or valued. It is also essential to the
contract that the insurer incur a risk in the underwriting
venture.

Insurance: A contract whereby, for an agreed premium,

one party undertakes to indemnity the other against loss
on a specified subject by specified perils.

Interest: In Contracts. The right of property which a man

has in a thing (See Insurable Interest). On Debts. The
compensation that is paid by the borrower of money to
the lender for its use, and generally, by a debtor to his
creditor in recompense for his detention of the debt.

Irrevocable Trust: A trust that is not revocable (see

REVOCABLE TRUST)

Joint Tenancy: A possession of estate by two or more

persons in unity and harmony of interest, title, possession
and time, under which the survivor takes the entire
amount.
Jurisdiction: The authority by which judicial officers take
cognizance of and decide causes. Power to hear and
determine a cause. It includes power to enforce the
execution of what is decreed.

Juristic Person: A legal entity created by law rather than

by nature, and having many of the same rights,
privileges, freedoms, obligations, and responsibilities of a
natural person. A corporation or a trust is a juristic person
as is a pure trust organization.

Land: In the most general sense, “Land” comprehends

any ground, soil, or earth whatsoever. In its more limited
sense, the term denotes the quantity and character of the
interest or estate which the tenant may own in land. The
term “lands” designates all real estate and the term
“land” may include anything that may be classed as real
estate or real property.

Land Grant: A donation of public lands to a subordinate

government, a corporation, or an individual; as from the
United States to a state, or to a railroad company to aid
in the construction of its roads.

Lease: A species of contract for the possession and profits

of lands and tenements either for life or for a certain term
of years, or during the pleasure of the parties, which
gives rise to the relationship of landlord and tenant. One
of its essential properties is, that its duration must be for
a shorter period than the duration of the interest of the
lessor in the land; or if he disposes of his entire interest it
becomes an assignment, and is not a lease. In other
words, the granting of a lease always supposes that the
grantor reserves to himself a reversion in the leased
premises. The party who leases is called the lessor, he to
whom the lease is made the lessee, and the
compensation or consideration of the lease is the rent.
The words lease and demise are frequently used to
signify the estate or interest conveyed; but they properly
apply to the instrument of conveyance.

Legal Title: One cognizable or enforceable in a court of

law, or one that is complete and perfect so far as regards
the apparent right of ownership and possession, but
which carries no beneficial interest in the property,
another person being equitably entitled thereto; in either
case, the antithesis of “equitable title."

Liability: The state of being under obligation; the debt or

other financial obligation of a business, of money, goods,
services, etc., received.

Liquidation: (Of a trust or business) To Pay the debts of;

to settle the accounts of (as in business); to dissolve the
trust and discharge the assets for final distribution.

Mandate: A contract by which one party gives to another

party power and authority to act in their behalf in a
prescribed manner.

Mortgage: The conveyance of an estate or property by

way of pledge for the security of debt, and to become
void on payment of it. An estate created by a conveyance
absolute in its form, but intended to secure the
performance of some act, such as the payment of money,
and the like, by the grantor or some other person, and to
become void if the act is performed agreeably to the
terms prescribed at the time of making such conveyance.
Both real and personal property may be mortgaged, and
in substantially the same manner, except that a
mortgage being in its nature a transfer of title, the laws
representing the necessity of possession of personal
property and the nature of instruments of transfer being
different, require the transfer to be made differently in
the two cases. The foregoing definitions are applicable to
the common-law conception of a morality. Many states in
modern times, regard it as a mere lien, and not as
creating a title or estate. It is a pledge or security of
particular property for the payment of a debt or the
performance of some other obligation, whatever form the
transaction may take, but is not now regarded as a
conveyance in effect, though it may be cast in the form of
a conveyance.

Natural Person: As in contrast to juristic person, a natural

person is a man, woman, or child.

Nature: From the Latin nasci, be born. The essential

quality of a thing, essence.

Non-Negotiable: Not able to transfer or pass; not able to

sell.

Non-Assessable: Not able to determine the value of, not

subject to assessment.
Obligation: A duty. A tie which binds us to pay or do
something agreeably to the laws and customs of the
country in which the obligation is made. Express or
conventional obligations are those which the obligor
binds himself in express terms to perform. The obligation
is one that arises by operation of law.
Offer: An offer, as an element of a contract, is a proposal
to make a contract. It must be made by the person who is
to make the promise, and it must be made to the person
to whom the promise is made. It may be made either by
words or by signs, either orally or in writing, and either
personally or by a messenger; but in whatever way it is
made, it is not in law an offer until it comes to the
knowledge of the person to whom it is made.

Perpetual: Never ceasing; continuous; enduring; lasting,

unlimited in respect of time; continuing without
intermission or interval.

Perpetuity: Any limitation or condition that may take away

or suspend the power of alienation, or take the subject of
it out of commerce, for a period beyond the life or lives in
being and 21 years thereafter.

Pledge: In the law of bailment. A bailment of goods to a

creditor as security for some debt or engagement. A
bailment or delivery of goods by a debtor to his creditor,
to be kept till the debt be discharged. The necessary
elements to constitute a contract one of “pledge” are:
Possession of the pledged property must pass from the
pledgor to the pledgee; the legal title to the property
must remain in the pledgor; and the pledgee must have a
lien on the property for the payment of a debt or the
performance of an obligation due him by the pledgor or
some other person.

Promise: An engagement by which the promisor contracts

towards another to perform or to do something in the
advantage of the latter. When a promise is made, all that
is said at the time in relation to it must be considered; if,
therefore, a man promises to pay all he owes,
accompanied by a denial that he owes any thing, no
action will lie to enforce such a promise. And when the
promise is conditional, the condition must be performed
before it becomes a binding force.

Promissory Note: A written promise to pay a certain sum

of money, at a future time, unconditionally. By the
Uniform Negotiable Instruments Act, a negotiable
promissory note is defined as an unconditional promise in
writing made by one person to another signed by the
maker engaging to pay on demand, or at a fixed or
determinable future time, a sum certain in money to
order or to bearer. Where a note is drawn to the maker's
own order, it is not complete until endorsed by him.
Although a promissory note, in its original shape, bears
no resemblance to a bill of exchange, yet when endorsed,
it is exactly similar to one; for then is an order by the
endorser of the note upon the maker to pay the
endorsee. The endorser is as it was the drawer, the
maker, the acceptor, and the endorsee, the payee. Most
of the rules applicable to bills of exchange equally affect
promissory notes. No particular form is requisite to these
instruments: a promise to deliver the money, or be
accountable for it, or that the payee shall have it, is
sufficient. Here are two principal qualities essential to the
validity of a note: First, that it be payable to all events,
not dependent on any contingency, or payable out of any
particular fund. Second, it is required that it be for the
payment of money only, and not in bank-notes; though it
has been held differently in the state of New York. A
promissory note payable to order or bearer passes by
endorsement, and, although a chose in action, the holder
may bring suit on it in his own name. Although a simple
contract, a sufficient consideration is implied from the
nature of the instrument.

Property: That which is peculiar or proper to any person;

that which belongs exclusively to one. In the strict sense,
an aggregate of rights that are guaranteed and protected
by the law. The term is said to extend to every species of
valuable right and interest. More specifically, ownership;
the unrestricted and exclusive right to a thing; the right
to dispose of a thing in every legal way, to possess it, to
use it, and to exclude everyone else from interfering with
it. The highest right a man can have to anything; being
used to refer to that right which one has to lands or
tenements, goods or chattels, which no way depends on
another man’s courtesy.
Protector: The duties of the protector of a trust are to
ensure that the trustee acts in the best interests of the
beneficiary. He may act as counsel to the trustee and
generally has the power to replace the trustee at will.

Pure Trust: A term often used to refer to a trust brought

into existence pursuant to the common law right of
contract. These contractually created entities are
generally formed through the utilization of two basic
documents. The first document is the Declaration of Trust
under which a Trustee receives property from a Creator or
Grantor and contractually obligates himself, upon receipt
of the property, to manage the property. The second
document is the Trust Indenture. The Trustee accepting
the property and undertaking to manage this corpus is
contractually bound to follow, strictly, the specific terms
of the Trust Indenture in carrying out his duties. Thus, the
documents creating the Trust impose contractual
obligations on the trustee to act as Fiduciary with respect
to the property and funds placed in his hands, initially by
the Creator or Grantor.

Quitclaim Deed: A deed of conveyance operating by way

of release; that is, intended to pass any title, interest, or
claim which the grantor may have in the premises, but
not professing that such title is valid, nor containing any
warranty or covenants for title.

Quorum: The number of members of any assembly (or

body) that must be present if the business done is to be
legal or binding. More than one half the membership
usually constitutes a quorum if no special rule exists.

Real Property: Land, buildings, crops, or mineral rights.

Resignation: A written statement giving that one resigns.

Reversion: A return to a former condition; the return of

property to the grantor or his heirs. An estate returning to
the person who granted it or his heirs.

Right: A well-founded claim. The ideas of claim and that

the claim must be well-founded always constitute the
idea of right. If these claims inhere in the very nature of
man himself they are called inherent, inalienable rights.
Right and obligation are correlative ideas. The idea of a
well-founded claim becomes in law a claim founded in or
established by the law; so that it is said that a right in law
is an acknowledged claim. Thus, at law, no right is
brought into existence until a well-founded claim is made
in a proper and timely manner.

Security: Protection; assurance; indemnification.

Settlor: The grantor or donor in a deed of settlement.
Also, one who creates a trust.

Standard of Living: Subjective evaluation of the

relationship between the total amount of goods
consumed and the total needs and desires.

Successor: A person who follows or succeeds another in

office, position or ownership of property. A person or thing
that comes next after another in a series.

Statutory law: The body of law created by acts of the

legislature in contrast to constitutional law and law
generated by decisions of courts and administrative
bodies. A statute is a formal written enactment of a
legislative body, whether federal, state, city or county.
Legislatively created laws in contradistinction to court
decided or unwritten law (common-law).

Tax Haven: The IRS Agents Handbook defines tax haven

as “a term that generally connotes any foreign country
that has either a very low tax or no tax at all on certain
categories of income. However, as the IRS uses the term,
it refers to the use of certain foreign countries by U.S.
taxpayers in order to avoid federal income tax.”

Taxes: The taking of wealth by government, either by

force or intimidation, from the productive people within
its political jurisdiction. People who produce no wealth
cannot be subject to the extraction of taxes. (See THEFT).

TCUs, UBIs, CUs: Instrument evidencing a fractional or

percentage interest in the corpus or property of trust
Trust Certificate Units, Units of Beneficial Interest, Capital
Units.
Tenants in Common: Those who hold property, or lands in
common.

Tenure: Holding; possessing. Length of time of holding or

possessing; terms; conditions, etc. on which anything is
held or occupied.

Testamentary Trust: A trust which does not take effect

until after the grantor’s death.

Testator: A person who makes a will. A person who has

died leaving a valid will.

Theft: The taking of the property (wealth) of another

without his consent and with the intent to deprive him of
it. May be accomplished by force, intimidation, fraud or
any combination of these. Wealth must have been
created before it can be stolen. (See TAXES)

Title: This means whereby the owner of lands comes into

legal possession of his property. The union of all the
elements which constitute ownership. The right to or
ownership in lands; also the evidence of such ownership.
A perfect title requires the union of possession and the
right to the thing possessed.

Tort: A legal wrong committed upon the person or

property independent of contract. It may be either (1) a
direct invasion of some legal right of the individual; (2)
the infraction of some public duty by which special
damage accrues to the individual; (3) the violation of
some private obligation by which like damage accrues to
the individual. Three elements of every tort action are:
Existence of legal duty from defendant to plaintiff, breach
of duty, and damage as proximate result.

Transfer: To convey or remove from one person or place

to another; hand over.

Trust: In General: A legal entity with a right of property

real or personal, held by one party of the benefit of
another by trust agreement.

Complex Trust: A trust in which the trustees have the

discretion to distribute any, all, or any portion, of the trust
income to the beneficiaries in any year.

Inter vivos Trust: A trust which goes into effect

during the grantor’s life.

Irrevocable Trust: A trust in which the trustor does

not retain the power to revoke the trust agreement, or in
which he can do so only after a ten year period.

Revocable Trust: The general rule is that a trust is

revocable where at any time the power to revest title of
property or revoke the trust agreement is maintained by
the grantor or a non-adverse party, or both. A revocable
trust is transparent for income tax purposes under the
Internal Revenue Code, since the grantor is treated as the
owner. When a trust is revocable, there is no reason why
the grantor should not also be trustee, since the tax
consequences are already settled by the revocability of
the trust.
 Simple Trust: A trust that is required by its Indenture
to distribute all the income in any year to the
beneficiaries.

Trustee: A person or one of a group of persons appointed

to manage the affairs of an individual, institution,
business, etc. A person who holds property in trust for
another.

Trustee: Person holding property in trust. One in whom

power and control is vested under an express or implied
agreement to administer or exercise for the benefit or to
the use of another.

Trust Indenture: The document that contains the terms

and conditions which govern the conduct of the trustee
and the rights of the beneficiaries. (Often referred to as
instrument of trust). The indenture controls the activities,
authority and responsibilities of those who administer the
trust. The indenture is the law by which the affairs of the
trust are administered and no one has legal authority to
violate or change its provisions except according to the
indenture.

Trustor: One who creates a trust. Also called settlor.

Trust Deed: A species of mortgage given to a trustee for

the purpose of securing a numerous class of creditors, as
the bondholders of a railroad corporation, with power to
foreclose and sell on failure of the payment of their
bonds, notes, or other claims. In some states, and in the
District of Columbia, a trust deed or deed of trust is a
security resembling a mortgage, being a conveyance of
lands to trustees to secure the payment of a debt, with a
power of sale upon default, and upon a trust to apply the
net proceeds to paying the debt and to turn over the
surplus to the grantor. A “trust deed” on real estate as
security for a bond issue is, in effect, a mortgage on
property executed by the mortgagor to a third person as
trustee to hold as security for the mortgage debt as
evidenced by the bonds, for the benefit of the purchasers
of the bonds as lenders.

Vested Interest: An estate is vested in interest when there

is a present fixed right of future enjoyment.

Warranty: A promise that a proposition of fact is true.

Real Property Law: A real covenant by the grantor of

lands, for himself and his heirs, to warrant and defend the
title and possession of the estate granted, to the grantee
and his heirs, whereby, either upon voucher, or judgment
and the eviction of the grantee by paramount title, the
grantor was bound to recompense him with other lands of
equal value.

Contracts: An undertaking or stipulation, in writing,

or verbally, that a certain fact in relation to the subject of
a contract is or shall be as it is stated or promised to be.
An express or implied statement of something
undertaken as part of contract but collateral to its object.
A warranty differs from a representation in that a
warranty must always be given contemporaneously with,
and as part of, the contract; whereas a representation
proceeds and induces to the contract. And, while that is
their difference in nature, their difference in consequence
or effect is this: that, upon breach of warranty, (or false
warranty), the contract remains binding, and damages
only are recoverable for the breach; whereas, upon a
false representation, the defrauded party may elect to
avoid the contract and recover the entire price paid.

Wealth: The tangible goods that are demanded and

consumed by human beings in their quest for survival
and comfort. Wealth must be created by individual
productive effort, and can only be acquired by such effort,
voluntary exchange or theft.

Void where prohibited by law.