What is a trust fund?

By definition, a trust fund is a separate legal entity that holds property and assets for an individual, and for their benefit. Trust funds can benefit the immediate individuals who inherit the assets, and they can also benefit generations to come. Some examples of assets included in trust funds are: money, stock, property, or even a business. The main purpose of a trust fund is for the person, or entity, to create a way for their assets to be distributed in the future. 

Who is involved in a trust fund?

There are three main parties involved in a trust fund. There is the grantor, the one that is willing the assets to someone. The beneficiary, the person for whom the trust fund was established. And finally, the trustee. The trustee can be a relative, a professional, a corporation, or even a friend. A trustee ensures that the trust fund is able to maintain its duties applicable under the appropriate laws and in accordance with the documents filed for the trust fund. 

Are there different types of trust funds?

There are several types of trusts. There are trusts that can be enacted while you are still living and ones after you pass away. A living trust permits asset control during the life of the grantor. Other types of trusts are: charitable trusts, land trusts, Medicaid trusts, and special needs trusts. 

If you are considering creating a trust fund, it would be useful to seek guidance from a family law attorney to ensure the legality of your decisions.