A bare trust is a trust in which the beneficiary has a right to both income and capital and may call for both to be remitted into his own name. Assets in a bare trust are held in the name of a trustee, but the beneficiary has the right to all of the capital and income of the trust at any time if they're 18 or over, or 16 or over. Bare trusts are often used to pass assets to young people - the trustees look after them until the beneficiary is old enough.
A straightforward type of trust into which a trustor transfers assets (money or property) in order to pass them on to beneficiaries. The initial owner of the assets (the trustor) loses all control over them once they are placed in the trust. The trustee has only nominal control of the assets in the trust. The trust's beneficiary has absolute entitlement to the assets once he or she turns 18.
This estate-planning tool is commonly used by parents or grandparents to transfer assets to children or grandchildren. The college financial-aid implications of putting money into a naked trust for children should be considered before establishing the trust.