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There are 4 basic steps in creating a trust fund:ģ.

Remember, a trust fund should only be prepared by a qualified estate attorney. Trust funds are one aspect of a person’s estate plan, and they determine how certain assets will be allocated. For example, assets can be distributed as a lump sum, installments, real estate property deeds, physical item transfers, and more. Trust funds are set up by the grantor and managed by the trustee until the time comes for the beneficiary to receive the payout or other assets.Īt that time, the contents of the trust will be distributed in the manner outlined in the fund. The main reason people open trust funds is to ensure their assets are distributed in the manner they choose, either while they’re still alive (more on this later) or after their death. Trust funds are legal entities that hold a number of asset types for the named grantor, including money, real property, investment accounts, a business, or any combination of these options. They’re created to house assets on another person’s behalf under the supervision of a licensed estate planning attorney.

Trustee: The individual or corporation that manages the assetsĪ trust fund is an estate planning tool that allows a person to put aside money and/or other assets that will later be distributed to the beneficiaries named on the trust.Beneficiary: Those who will receive the assets from the trust.Grantor: The individual who puts the assets in the trust fund.If you have funds you’d like to distribute to loved ones before or following your death, you may want to consider setting up a trust fund now.īefore we dive into the details of setting up a trust fund, it will be helpful to understand these three common terms associated with trusts: They’re designed to provide financial support and protection for your loved ones. A trust fund can be an effective financial tool for nearly any person’s circumstances.