Bare Trust

In this most basic form of clothed trust, the beneficiary has the absolute and total right to the assets and capital contained therein, including any income or interest generated from them. While the assets of the trust are invariably held in the trustee's name (and not necessarily the beneficiary's), the trustee has no authority over when or how the capital of the trust will be distributed. The trustee simply manages the assets for the purpose of the beneficiary's maximum advantage, or as legally instructed by the trust's creator.

So when wise parents are looking for a way to transfer assets to their unwise children (to save it from, say, being blown on lavish pool parties, fancy cars, and all-you-can-eat buffets of 24 karat gold ice cream), they will often place said assets in such a trust. Under bare trust rules, the beneficiary is permitted to choose when the trust's assets are to be recovered, provided that they are 18 years or older. The funds can then be used in any manner in which the beneficiary sees fit.