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.

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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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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 >>
  3. Can I put my IRA in a trust?

    You cannot put your IRA in a trust while you are living. You can, however, name a trust as the beneficiary of your IRA and ... Read Full Answer >>
  4. How does the trust maker transfer funds into a revocable trust?

    Once a revocable trust is created, a trust maker transfers funds or property into the trust by including them in a list with ... Read Full Answer >>
  5. What is the difference between a revocable trust and a living trust?

    A revocable trust and living trust are separate terms that describe the same thing: a trust in which the terms can be changed ... Read Full Answer >>
  6. How exactly does one go about revoking a revocable trust?

    The basic steps involved in revoking a revocable trust are fairly simple, and include transfer of assets and an official ... Read Full Answer >>

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