Moneyzine
Contents
/Personal Finance/Oral Trust (Parol Trust)

Oral Trust (Parol Trust)

Moneyzine Editor
Author: 
Moneyzine Editor
1 mins
September 25th, 2023
Advertiser Disclosure

Definition

The term oral trust refers to an agreement that is established based on the spoken words of the donor, or settlor. Oral trusts can be created for personal property, but most jurisdictions require a written document for real property such as land.

Explanation

Also referred to as a parol trust, an oral trust is created based on the spoken words of the donor or settlor. They can also be created as part of a legal remedy to correct the unjust enrichment of another party as is the case with constructive trusts. Typically, jurisdictions will honor oral trusts if the donor's assets include personal property. Trusts involving real property, such as land trusts, cannot be created orally unless a written document is then signed by the donor.

Oral trusts are not considered a formal estate planning tool, since the terms of the trust can be brought into dispute. For this reason, oral trusts involving personal property can only be established if there is "clear and convincing evidence." Unfortunately, the words of the donor alone may not be considered clear and convincing evidence by the donor's heirs and their attorneys.

Related Terms

Related Content

  • What Can Help You Meet Your Budget While Shopping for Important Items?
    Budgeting while ensuring you don't compromise on quality can seem daunting. Whether filling your pantry, updating your wardrobe, or keeping up with the latest tech, smart shopping strategies are crucial for keeping your finances in check.
    April 2nd, 2024
  • How to Make a Million Dollars in 10 Years
    Truthfully, this title should actually be “How to Make a Million Dollars in 10 Years Without Going Into Debt", but that is just getting a little too winded for my liking. It’s true though!
    November 18th, 2024
  • How to Apply Maslow’s Hierarchy to Your Money This Year
    You might vaguely remember your psychology teacher talking about Maslow. He pointed at a picture of a triangle as you nodded off in the back of the school room.
    November 18th, 2024
  • How to Tackle Multiple Savings Goals
    When there’s only so much money to go around, there are often multiple savings goals competing for your money. Think of the young professional who’d like to get a more reliable car, buy a house, and save for retirement. Or consider the young family that’s saving for college, retirement, and a bigger house.
    March 22nd, 2024
  • The Countdown to Early Retirement: 10 Expenses to Eliminate
    Dreaming of waving goodbye to the daily grind five years ahead of schedule? The road to early retirement is paved with more than good intentions; it requires a meticulously crafted strategy with surprising twists. It's not solely about what you should be doing—like diligently saving a portion of your income or investing wisely—but also about what you need to stop doing.
    March 22nd, 2024

Contributors

Moneyzine Editor
The Moneyzine editorial team consists of writers and content specialists with diverse backgrounds.
Moneyzine 2024. All Rights Reserved.