Trust Fund

AAA

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.

INVESTOPEDIA EXPLAINS '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.

VIDEO

Loading the player...
RELATED TERMS
  1. Beneficial Interest

    The right to receive benefits on assets held by another party. ...
  2. Hospital Insurance Trust Fund

    This trust fund is part A of Medicare, the United States' health ...
  3. Bare Trust

    A basic trust in which the beneficiary has the absolute right ...
  4. Qatar Investment Authority - QIA

    The Qatar Investment Authority (QIA) is a government-owned entity ...
  5. Secondary Beneficiary

    A person or entity that inherits assets under a will, trust or ...
  6. Primary Beneficiary

    A beneficiary in a will, trust or insurance policy that is first ...
RELATED FAQS
  1. How are trust fund earnings taxed?

    Trust funds are taxed differently depending on the type. A trust that distributes all its income is considered to be a simple ... Read Full Answer >>
  2. What are the main differences between a provident fund and a pension fund?

    Provident funds and pension funds are types of retirement plans used around the world, but their specifics differ from region ... Read Full Answer >>
Related Articles
  1. Personal Finance

    What's a Trust Fund?

    A trust fund is a fund comprised of a variety of assets, established by a grantor, to provide financial security to an individual, most often a child or grandchild - or organizations, such as ...
  2. Retirement

    Top 7 Estate Planning Mistakes

    Many people try to avoid this process altogether, making things difficult for heirs.
  3. Home & Auto

    Can You Trust Your Trustee?

    Ignorance and incompetence can cost you money. Make sure your trustee is up to the task.
  4. Retirement

    How To Choose The Right Executor For Your Estate

    Making a careful choice now can save your heirs from a lot of problems later.
  5. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  6. Options & Futures

    Three Documents You Shouldn't Do Without

    Estate planning is not just about the division of assets after you die. Read on to save your loved ones extra grief.
  7. Professionals

    Tips for Spreading the Wealth to Relatives

    There are many ways that your clients can move money or other assets to relatives in order to reduce their tax bills. Here's a primer on best practices.
  8. Professionals

    Tips for Handling Client Inheritance

    When clients leave or receive an inheritance, be prepared to deal with much more than mere paperwork or financial transactions.
  9. Professionals

    Advice on Dealing with Unequal Inheritances

    When it comes to inheritances, the concept of equal versus equitable can be hard to navigate, even when all parties are reasonable.
  10. Professionals

    Top Tips for Family Wealth Transfers

    Essential tips for tackling family wealth transfers.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center