Business, Legal & Accounting Glossary
A funded trust, alternatively referred to as a trust fund, is made up of various assets such as stocks, cash, bonds, and real estate, to mention a few. As a legal body that holds various types of property, there are three critical players: the grantor, beneficiary, and trustee. A grantor forms a trust fund to secure the financial security of the beneficiary—typically a child or organization—until the beneficiary reaches a specified age or event. On the other hand, trustees manage the money in accordance with the trust fund’s specifications.
There are numerous reasons why individuals establish a funded trust. In contrast to a will, which enters public record upon your death, a funded trust remains private. Additionally, it can provide distribution for an extended period of time. For example, once your beneficiary reaches a specified age, the trust can offer a monthly stipend. A trust fund can be classified in a variety of manners. Irrevocable trusts, revocable trusts, and charitable remainder trusts are all typical types of trust funds. While an irrevocable trust fund cannot be amended, a revocable trust fund, often known as a living trust, enables the grantor to move and add assets during their lifetime. Finally, the charitable remainder trust is set up to donate the trust assets to a designated organisation or charity after the trust’s conclusion.
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This glossary post was last updated: 7th January, 2022 | 0 Views.