Trust Fund

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DEFINITION of 'Trust Fund'

A trust fund is a fund comprised of a variety of assets intended to provide benefits to an individual or organization. The trust fund is established by a grantor to provide financial security to an individual, most often a child or grandchild - or organizations, such as a charity or other non-profit organization.

BREAKING DOWN 'Trust Fund'

A trust fund can be comprised of cash, stocks, bonds, property and other types of financial products. The recipient of a trust fund must typically wait until a certain age, or until a specified event occurs, to receive a yearly income from the fund. Prior to this, a single trustee, or a group of trustees, manages the fund in a manner appropriate to the trust fund's specifications. This will usually include some allowance for living expenses and perhaps educational expenses, such as private school or college.

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