Also known as: Massachusetts trusts · business trust · common-law trust
Written by attorneys · grounded in primary & secondary sources — see below
A form of unincorporated business organization created by a declaration of trust under which assets are transferred to trustees who hold legal title and manage the property for the benefit of holders of transferable certificates of beneficial interest.
Matthew Martinez creates a Massachusetts trust to pool investor funds for real estate ventures. The trust serves as a limited partner alongside Midwest Airlines in a multi-year project. When the trust terminates its operations before project completion, the partnership cannot expel it under the willful-dissolution provision because the entity qualifies as a business trust rather than an ordinary corporate partner.
Maria Morales organizes a Massachusetts trust to hold securitized mortgage assets and issues transferable certificates to investors. The trust enters a partnership with Marathon Logistics for a fixed-term development. Upon the trust's voluntary termination, the remaining partners cannot treat the dissociation as wrongful under the statute because the entity is a business trust excluded from the expulsion category.
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A Massachusetts trust is formed by a declaration of trust rather than articles of incorporation and issues transferable certificates of beneficial interest instead of stock shares. Trustees hold legal title and manage the assets as principals for the certificate holders. The structure historically provided limited liability while avoiding state restrictions on corporate real-estate ownership.
Uniform acts expressly exclude a business trust from the category of persons subject to expulsion for willful dissolution or termination. This preserves the trust's ability to wind up without triggering wrongful-dissociation liability that applies to corporations and other entities. The distinction appears in the statutory text defining the scope of the expulsion provision.
The form is now used primarily for asset-securitization transactions in which income-producing assets such as mortgages are placed in trust and participation interests are sold to investors. The structure continues to offer limited liability and centralized management without corporate formalities.