Trust refers to the act that the principal entrusts his property rights to the trustee based on his trust in the trustee, and the trustee manages and disposes in his own name for the benefit of the beneficiary or for a specific purpose according to the wishes of the principal.
Trust is a way of financial management, a special property management system and legal behavior, and also a financial system. It constitutes a modern financial system with banks, insurance and securities.
functions of the trust
1. The function of financial management on behalf of customers broadens investors' investment channels.
2. Gather funds to serve the economy.
3. The role of avoiding and dispersing risks:
4. Promote the development and perfection of the financial system;
5. Develop social welfare undertakings and improve the role of social security system.
6. It is conducive to building a social credit system.
take for example
Banana is a local tyrant and has a daughter. He loves her very much and is worried that he will die prematurely or that something unpredictable will affect her life in the future. So Banana found a trustworthy person, Orange, entrusted his property to him and agreed to give his daughter pocket money regularly. When her daughter is 20 years old, she will give her all the money so that her daughter can have security in the future.
Banana is the principal; Oranges are trustees; Banana's daughter is the beneficiary.