Types of trusts

Trusts can be categorized in various ways, such as purpose, method of entrustment, types of entrusted assets, method of returning trust property on termination of the trust, and investment method.

First, trusts can be largely separated into trusts of money, which is entrusted with money, and trust of goods, which is entrusted with things other than money (trust of things).

Trusts of money can be separated into money trusts, where the trust property is converted into cash on termination of the trust, and trusts of money other than money trusts, where the trust property is not converted to money.
In addition, trusts of money can be categorized by the investment instructions and investment method. Within those money trusts categorized by investment instructions, one type specifies the purpose of investment (specified money trusts) and the other type gives a general designation of the types of investments that meet the purpose (designated money trusts). Among trusts categorized by investment method, there is jointly managed investment, where there is joint investment in entrusted assets, and individual investment, where investments are made on an individual basis.

Typical trusts of money include pension trusts such as the defined benefits type corporate pension trust or the employees' pension fund trust, and charitable trusts that benefit society. There are also specified money trusts (‘tokkin'), where the settlor gives specific instructions to the trustee concerning the investment method and investment trusts, where funds from individual investors and others are pooled into a fund that invests in securities and financial markets on behalf of the investors with the profits payable to the investors.

Typical trusts of things include securities trusts that receive securities and monetary claims trusts that receive monetary claims as trust property when the trusts are underwritten. A description of each type of trust is provided below.

Trust categories