Oregon 30-Hour Real Estate Law Practice Test

Which is a characteristic of a trust?

1. It must involve only real estate properties

2. It can be revoked at any time

3. It requires a public announcement

4. It can hold various types of assets

The correct answer is: It can hold various types of assets

A trust is a legal arrangement where one party, the trustee, holds property or assets for the benefit of another party, known as the beneficiary. One of the key characteristics of a trust is its ability to hold various types of assets, not limited to just real estate. This flexibility allows trusts to encompass a wide range of property, including cash, stocks, bonds, personal belongings, and more. By allowing multiple asset types, a trust can be tailored to meet the specific needs and goals of the grantor and beneficiaries. Other options highlight misunderstandings about trusts. For instance, the notion that a trust must involve only real estate properties is incorrect, as trusts can manage an array of asset types. The idea that a trust can be revoked at any time applies specifically to revocable trusts, but many trusts are irrevocable, meaning they cannot be altered or revoked once established. Lastly, the requirement for a public announcement is a misconception; unlike wills that may need to go through probate and public court processes, trusts can often be managed privately without public disclosure. Thus, the characteristic that a trust can hold various types of assets captures the essence and functionality of trusts comprehensively.