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Finance: What is a trust deed? 3 Views
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Description:
A trust deed lays out the rights and obligations of the bank underwriting the purchase of inventory/assets. That said, it won't catch you in a trust fall.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
- Terms and Concepts / Board of Directors
- Terms and Concepts / Incorporation
- Terms and Concepts / Insurance
- Terms and Concepts / Regulations
- Terms and Concepts / Retirement
- Terms and Concepts / Tax
- Terms and Concepts / Trusts and Estates
- Terms and Concepts / Wealth
Transcript
- 00:00
Finance allah shmoop What is a trust deed here This
- 00:07
is okay So that's more of a trust fall A
- 00:10
trust deed is a kind of how to build it
- 00:14
kitt which instead of describing the construction of ah balsa
- 00:17
wood airplane describes how assets should be owned cared for
Full Transcript
- 00:22
managed and eventually disposed of two the beneficiary or whoever
- 00:27
bought him in the first place or who were involved
- 00:29
in the model airplane build from the beginning What does
- 00:32
that mean Well a trustee lays out the rights and
- 00:35
obligations of the bank underwriting the purchase of whatever inventory
- 00:39
is involved here In this trust deed it lays out
- 00:43
the rights of the people transacting and it spells out
- 00:45
who gets called defend or when there is a conflict
- 00:48
And this is particularly useful in a world where there
- 00:51
is indeed not a lot of trust Essentially a business
- 00:54
owner is just holding merchandise that was bought by the
- 00:58
bank like eighteen miles of denim fabric with intentional rips
- 01:03
and tears in it You know those things as the
- 01:05
business owner stitches together hundreds than thousands of sets of
- 01:08
genes which they then sell into the fashion market places
- 01:13
In new york and milan the bank via their trust
- 01:17
deed owns that merchandise until the business owner essentially buys
- 01:21
them out of it or pays back the loan amount
- 01:24
committed when the merge was initially bought The trusty it'sjust
- 01:28
the legal documentation that outlines the various obligations of both
- 01:32
parties i'ii think of it as a contract light Why
- 01:35
would you want one of these arrangements If you're a
- 01:37
business owner Like why bother with all this trust deed
- 01:40
stuff and inventory and banks Well if you didn't have
- 01:43
tohave one well you wouldn't But if you're a fledgling
- 01:46
company hoping to make it big in the big city
- 01:49
and you need lots of inventory to make lots of
- 01:51
genes or nobody takes you seriously well then you do
- 01:54
what you have to dio and you can imagine that
- 01:56
banks charge very high interest for setting up the's trust
- 02:00
deeds because the credit risk they take here is usually
- 02:03
reasonably very high like the levi stitching company just vanishes
- 02:08
one night or was in fact a meth lab using
- 02:10
the denim as a mano a filtration process and the
- 02:14
mexican mafia comes in one night ending and this little
- 02:17
companies Entrepreneurial activities Well another reason banks charge high interest
- 02:20
is because the last thing they want tohave to dio
- 02:23
is repossess eighteen miles of denim and then try to
- 02:26
get their money back by selling that eighteen miles of
- 02:29
denim on ebay So as a result not only do
- 02:32
trusted borrowers pay high interest but they also have to
- 02:35
carry relatively expensive insurance on that inventory So that at
- 02:40
the end of the day the on the bank isn't
- 02:42
left high and dry Or at least you know just 00:02:44.81 --> [endTime] dry
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