A business arrangement in which the investor serves as the "grantor" of the trust, and gives management authority to a trustee. The investor / grantor's liability is limited to their investment (the trust property), thus this is a similar arrangement to a limited partnership.
Note that "Massachusetts Trust" is an informal term, and the trust need not have any connection to Massachusetts. Also known as an unincorporated business organization, or UBO.
Definition from Nolo’s Plain-English Law Dictionary
A legal trust set up for the purpose of doing business. Investors give management authority to a trustee and receive "trust certificates" representing their investments. Since they own only the certificates and do not participate in management, the investors are not personally liable for any debts of the trust. Similar to a "limited partnership," a Massachusetts trust does not need to be set up in Massachusetts.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:19 pm