Which term describes a legal arrangement that details how assets are held and managed for the benefit of another person?

• A. Beneficiary
• B. Guardian
• C. Co-fiduciary
• D. Trust

Answer: (D)

In estate planning, a trust is the legal arrangement that describes how assets are held and managed for someone else’s benefit. Here, a grantor places assets into a trust anddesignates a trustee to administer those assets according to the terms set out in the trust document. The trustee holds fiduciary duties to manage investments, make distributions, and eventually transfer the assets to the designated beneficiaries as directed. Trusts can be revocable or irrevocable and can be used to control when and how wealth is distributed, avoid probate, plan for incapacity, or protect assets. This concept is distinct from a guardian, who is a person appointed to care for a ward or their property; a beneficiary, who is the recipient of the trust’s benefits; and a co-fiduciary (co-trustee), which refers to multiple people sharing the fiduciary duties, not the mechanism itself.