Trust Fund
Candlefocus EditorTrust funds hold assets that can include cash, stocks, real estate, and other investments. Generally speaking, these funds are managed by a third party, known as the trustee, who is responsible for the management and usage of the assets. The trustee must adhere to the instructions of the grantor of the trust, who establishes the terms of the trust and also defines the rights of the beneficiary.
Trust funds can be revocable or irrevocable. A revocable trust is a type of trust in which the grantor can revoke or modify its terms with the consent of all parties involved. An irrevocable trust, on the other hand, can not be modified or revoked unless all parties agree. An irrevocable trust is often used to minimize tax liabilities, pass on assets from one generation to the next, provide for special needs of dependents, or ensure legal protection for a beneficiary.
Trusts can also have various other purposes, including creating a will with specific provisions, or creating a trust in which the grantor can appoint a custodian to manage the trust until the beneficiary is of age to receive the assets. Trust funds can also be used to distribute funds to charitable organizations, manage large sums of money, or provide financial security for elderly parents.
Trust funds are widely used to protect and manage assets and provide for those who may be unable to manage the money on their own. Trust funds can provide safety, the opportunity to pass wealth between generations, and financial assistance during times of need.