Direct Trust | Definition | What is a Directed Trust?

Direct Trust

Direct Trust | Definition

A directed trust is one under which the trustee has less than full managerial authority. This will be the case whenever somebody else, who is not a trustee, has the power to control particular actions of the trustee. ERISA contemplates three different kinds of directed trusts. A plan may call for the shift of authority over assets, to whatever extent is desired from the trustee, (a) to plan participants or beneficiaries in respect of the assets allocated to their own individual accounts, or (b) to a "named fiduciary who is not a trustee," or (c) to an investment manager.

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