21. TRUST COMPANY. Definition.— A corporation authorized by law to act as trus tee, or to accept and execute trusts of various descriptions; a corporation empowered to act in a fiduciary capacity. This is the meaning of the term etrust company,• and is expressed in the name given to such a company in Australia,— a company.* In current usage, the term is applied to any corporation orgamzed under the trust company laws of the several States, whether such cor poration actually undertakes any trust business or not. While these laws invariably grant certain powers to accept and execute trusts, including always the power to act as trustee, they also grant other powers, of considerable variety in the different States, of which more or less limited banking powers are always a part. Except with the oldest companies, the volume of banldng business usually exceeds that of trust business; and it results that to the average person the trust company presents itself as a peculiar kind of bank. In fact many of the smaller and newer trust companies do practically no trust business, and their actual functions are those of ordinary banks of de posit and discount, or of savings banks, or of a combination of the two. On the basis of the business actually transacted, therefore, the trust company may be defined as a financial corporation authorized to exercise both banking and trust functions.
Functions. 1. Trust Functions.—The func tion which gives the trust company its name is that of accepting and executing trusts. In the exercise of this function the trust company performs the same acts and assumes the same responsibilities as an individual acting in like capacity. Trusts are received from natural persons or individuals, from corporations, both public and private, and through appointment or approval of courts of law. It is convenient to consider the trust functions under these heads: (a) Trusts performed for individuals under private agreement. Most of these trusts in volve acting as trustee or agent, but they are of great variety as to purpose and as to duties required. The most common is that of acting
as trustee or agent for the management of property, real or personal. In this capacity the trust company takes entire charge of the property, collects income, collects principal of securities when due, reinvests capital funds if desired. If the property be real it looks after repairs and improvements, keeps the property rented and insured, pays taxes, collects rents. It remits or accumulates income, according to the contract.
It handles the separate estates of married women; looks after the investment and care of funds of educational or benevolent institu tions; acts as custodian of valuable papers and securities; handles escrows; collects income which is receivable at long intervals or at un certain periods and distributes it per contract in monthly instalments; acts as agent for the payment of such regularly recurring items as insurance premiums, rents, taxes, etc.; looks after property interests of professional men, ,absentee property owners, women, invalids, the aged and others who, from choice or neces sity, wish to avoid the care of their property either temporarily or permanently. These illus trate some of the many kinds of °individual trusts.° (b) Trusts received through appointment or approval of the courts. In most States trust companies have a large volume of °probate business,° consisting of the execution of trusts received by appointment of court or by wills of deceased persons,— acting as administrator, executor, trustee under will, guardian of the property (and in rare instances of the person) of mmors, curator or committee for persons of unsound mind, etc. As a rule trust com panies are legal depositaries for court funds and for persons acting in fiduciary capacities. Trust companies handle a large amount of °insolvency business,° acting a.s assignees, re ceivers and trustees in banlcruptcy.