A trust is a legal arrangement in which one party, the trustee, holds property for the benefit of another party, the beneficiary. The trustee may be an individual, a corporation, or a trust company.
The beneficiary may be an individual, a group of individuals, or a charity. The property held in trust can be almost anything—cash, stocks, bonds, real estate—and the terms of the trust can be very simple or very complex.
Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
A trust is created when someone (the settlor) transfers property to another person (the trustee) to hold for the benefit of someone else (the beneficiary). The settlor may be the owner of the property or simply someone who wants to give the property to someone else but retain some control over it—for example, to make sure that it is used for a specific purpose.
The trustee is the legal owner of the property and is responsible for managing it and carrying out the terms of the trust. The beneficiary is the person who will receive benefits from the trust—for example, income from investments or use of property.
The settlor may specify in the trust agreement how and when the beneficiary will receive benefits from the trust. For example, the settlor may specify that the beneficiary will receive income from investments made by the trustee or that the beneficiary will have use of certain property held in trust.
Or, the settlor may give the trustee discretion to decide when and how much beneficiaries will receive from the trust.
The settlor may also put conditions on how the trustee invests trust assets or what property can be held in trust. For example, the settlor might require that only certain types of investments be made or that certain types of property be excluded from the trust.
Or, if there are multiple beneficiaries, the settlor might specify that each beneficiary will receive only certain types of benefits or benefits in certain proportions.
It is possible to put Bitcoin in a trust. The Bitcoin would be considered an asset of the trust and would be subject to all applicable lAWS governing trusts including state probate lAWS if applicable.
In order to properly administer a trust containing Bitcoin it would be advisable to consult with an attorney familiar with trusts and estate planning as well as cryptocurrency law.