What is referred to when property is held by a third party for the benefit of someone else?

When property is held by a third party for the benefit of someone else, it is referred to as being "in trust." This arrangement involves a trustor who transfers property to a trustee, who manages and holds the property for the benefit of a beneficiary. The trustee has a fiduciary duty to act in the best interest of the beneficiary and must follow the terms set forth in the trust agreement. This concept is particularly important in estate planning and managing assets for those who may not be able to do so for themselves.

Understanding this arrangement is crucial because it highlights how property can be managed and protected for specific purposes, differing significantly from ownership models like tenancy in common, co-ownership, or fee simple, which refer to direct ownership and rights to property rather than the relationship involving a trustee and beneficiaries.