Legal Definitions - fide-committee

Fide-committee is an older, less commonly used legal term that refers to a beneficiary in a trust. In simpler terms, a fide-committee is the person or entity for whose benefit a trust is established. A trust involves one party (the trustee) holding and managing assets or property for the benefit of another party (the beneficiary, or fide-committee).

The trustee is bound by a legal duty to act in the fide-committee's best interest, managing the assets responsibly and according to the trust's terms. The term "fide-committee" historically emphasized the reliance on the trustee's "good faith" (from the Latin fidei) to fulfill the trust's purpose. While "beneficiary" is the standard term used today, "fide-committee" points to the individual or entity who ultimately gains from the trust's provisions.

Here are some examples illustrating the concept of a fide-committee:

• Example 1: A Trust for a Minor Child's Education

  A parent establishes a trust fund to ensure their young child's future college education and living expenses are covered. The parent appoints a financial institution as the trustee to manage the investments until the child reaches adulthood.

  Explanation: In this situation, the child is the fide-committee. The trust is created solely for their benefit, and the financial institution (as trustee) is legally obligated to manage the funds responsibly and disburse them according to the trust's terms to support the child's education and well-being.

• Example 2: A Trust for a Surviving Spouse's Care

  An individual creates a testamentary trust (a trust established through a will) to provide for their surviving spouse's ongoing financial support and medical care for the remainder of their life. A trusted family member is named as the trustee.

  Explanation: The surviving spouse is the fide-committee. The trust assets are held and managed by the family member (trustee) specifically to provide financial support and care for the spouse, demonstrating the trustee's commitment to the spouse's well-being as the intended beneficiary.

• Example 3: A Charitable Organization as a Beneficiary

  A philanthropist establishes a perpetual trust to provide annual grants to a specific environmental conservation charity. A board of professional trustees is appointed to manage the trust's endowment and ensure the funds are distributed to the charity as specified.

  Explanation: Here, the environmental conservation charity acts as the fide-committee. The trust exists to benefit the charity's mission, and the board of trustees is responsible for ensuring the trust's assets are managed and distributed faithfully to support the charity's work, making it the ultimate beneficiary of the trust's provisions.