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Simple English definitions for legal terms
trust indorsement
Read a random definition: new-use claim
A quick definition of trust indorsement:
Trust indorsement is when someone signs the back of a piece of paper that can be used as money, like a check, and says that the person who gets the money is actually holding it for someone else. This is a way to make sure the money goes to the right person. There are many different types of indorsements, like ones that limit the signer's responsibility or ones that only let the money be used in certain ways.A more thorough explanation:
Definition: Trust indorsement is a type of indorsement where the payee becomes a trustee for a third person. It limits the instrument to the use of the indorser or another person.
Example: "Pay Erin Ray in trust for Kaitlin Ray."
This means that the payee, Erin Ray, is holding the money as a trustee for Kaitlin Ray. The money cannot be used for any other purpose than what Kaitlin Ray intended it for.
Trust indorsement is a type of restrictive indorsement that limits the use of the instrument to a specific person or purpose. It is often used in situations where the payee is not the intended recipient of the funds, but is holding the funds on behalf of someone else.