What defines a personal trust?

A personal trust is fundamentally defined as a legal entity that holds and manages assets on behalf of an individual or a group of individuals. It is established to benefit the named beneficiaries according to the terms set forth by the trustor (the person who creates the trust). This arrangement allows for the management and distribution of assets in a way that can provide financial support for the beneficiaries while also potentially offering tax advantages and protecting the assets from creditors or legal claims.

In this context, the trust itself is a distinct legal arrangement that involves a fiduciary relationship: the trustee (the individual or institution managing the trust) must adhere to the terms of the trust and act in the best interests of the beneficiaries. This makes the definition of a personal trust unique and specifically related to asset management and estate planning.

The other options describe financial concepts or entities that serve different purposes. For instance, investment strategies focus on how to allocate resources to optimize returns, retirement savings tools involve specific accounts designed to facilitate long-term savings for retirement, and governmental financial institutions refer to entities created and operated by a government to manage public assets and finance functions. Therefore, their roles and definitions do not fit the criteria established for a personal trust.