A Deed of Trust is a formal written agreement between the seller and the buyer to temporarily give the property to a neutral third party to serve as a trustee. Alternate Names: Trust Deed; Trustee Deed; Deed of Settlement. Unlike other types of Real Estate Deeds, a Deed of Trust does not transfer real estate directly the trustee holds the property until the buyer pays the purchase price. In many states, these forms are used instead of mortgages. There are four different types of Trust Deeds: A discretionary trust. A direct descendants trust. A unit trust. A fixed unit trust. Discretionary or family trusts allow the trustee to make decisions for the trust and to distribute capital and income to the beneficiaries. Direct descendants trusts usually contain provisions preventing the trustee from distributing capital to anyone who is not a direct descendant of the nominated beneficiary. Unit trusts permit the distribution of capital and income in fixed proportions. Fixed unit trusts entitle individuals to all of the capital and income of the trust.