Trust funds are a great way to have a high amount of control over your wealth, and have the power to determine how it will be distributed over time. It can be preferable to a will in this sense, because you can control the time period in which the trust fund will be distributed.
This blog will outline the basics of what a trust fund is and how it is managed.
The basics of a trust fund
A trust is similar to a small corporation in the sense that it is a legal entity. A trust fund usually involves three members: a grantor, who is the person that established the trust and puts in the money; a beneficiary, who is the intended person or people that are set to receive the money of the fund; and the trustee who is there to provide independent management of the trust. The trustee could be a private individual or a law firm.
The advantages of a trust fund
Trust funds have many advantages over a will or investment. Some advantages include the following:
- Trusts will always be private and information will be kept between those involved. Wills become public after the person dies.
- Trust funds can protect assets as well as provide them to the beneficiaries.
- Trusts can cover things such as property and insurance policies, whereas wills cannot.
Inquire about creating a trust fund
If you are interested in starting a trust fund, it is important to seek trusted legal guidance so that you can weigh up your options.
Source: Find law, "What is a trust fund," accessed July 26, 2017