What is a Trust Fund?

A trust fund is generally associated with a wealthy and prosperous individual. But in reality, a trust can be an efficient and effective method of managing assets for just about anyone. Any type of asset can be held in a trust. A trust can be created while a person is alive or it can be created through a will after death. The person who creates the trust is the grantor, donor or settlor. The individual or entity that will oversee or manage the trust is the trustee. The owner of the trust is the beneficiary, which is the beneficial or equitable owner of the trust and can be one or more people or entity. The beneficiary will receive the income or assets from the trust immediately or in the future, it can also be structured to deliver payments at intervals. If multiple beneficiaries are to receive assets from a trust the pay-outs can be structured individually.

Do you need to structure a trust fund? Contact an experienced CPA to help you secure a trust fund today.

Trusts can take on many facades and are used by everyone from individuals and government to corporate entities and charities they can be structured for payments of pensions, inheritance, legal settlements, etc.

Different structures of a trust fund:

• Privacy – Many people create a trust for the privacy it affords the grantor and the beneficiary. While wills are public information trusts are not, therefore allowing more privacy to the families or organizations involved.
• Wills or Estate Planning –The most common use of a trust is in a will for the reason of estate planning and distribution of assets. The assets can be held until the beneficiary is of a certain age or certain stipulations are met.
• Charities – Different jurisdictions have varying rules for charities but regardless of the local regulations, trusts are a simple and effective way for philanthropists to ensure their legacy will continue to provide for people in need. 
• Self-control – Some people create a trust to ensure they don’t squander money. An inter-vivos trust can be created to disburse funds only for reason expressed in the trust agreement.
• Unit Trust – Is a form of cooperative investment comprised under a trust deed. The concept for this type of trust is so flexible that it is used as an investment vehicle.
• Corporate Structures – Finance and insurance agreements usually use trusts to structure payment plans and business arrangements. 
• Pension Plans – Are another way trusts are used to structure payments from grantor (employer), to the beneficiary (employee).
• Asset Protection – A discretionary trust can offer protection from creditors in case of financial hardship by separating the individual form the assets in the trust fund, even if the individual is forced to file bankruptcy. This type of trust can also save a considerable amount on inheritance tax.
• Tax Planning – Setting up a trust fund for your survivors offers a couple of benefits from your desired distribution of assets to reducing the inheritance tax burden for your beneficiaries. 

Our experienced and capable accountants can set up a trust fund to satisfy your needs and desires for stable and systematic distribution of your assets to those that matter most in your life, offering you and your loved ones the confidence and peace-of-mind that comes from knowing your wishes will be carried out according to your specifications.

Do you need to structure a trust fund? Contact an experienced CPA to help you secure a trust fund today.