What Is the Legal Distinction between a “Trust” and a “Custodian” in Asset Holding?

A trust is a legal arrangement where one party (the trustee/custodian) holds assets for the benefit of another (the beneficiary). A custodian, in a general sense, is a party responsible for safeguarding assets.

The key distinction is that a trust creates a fiduciary relationship with specific legal duties, offering a higher level of legal protection for the beneficiary's assets against the custodian's insolvency.