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Old 08-18-2008, 07:41 PM
trent trent is offline
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A trust fund is a fund whose assets are managed by a trustee for the benefit of a third party (beneficiary). For example if I wealthy father wants to give a substantial sum to his son he can put it in a trust fund and hire a trustee to manage the fund. The trustee will get specific instructions of how to manage the fund (for example when the son goes to college pay all expenses, pay certain amount of money per month for living expenses, etc.)

The idea behind an income trust is to create a separate legal entity that controls certain financial assets like real estate, cash, bonds, and stocks. This is done to benefit of the beneficiary of the trust (the son in the above example). A trust fund can reduce estate taxes in some cases. It also can help
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