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Old 08-18-2008, 03:06 PM
sunshine sunshine is offline
Join Date: Jun 2008
Posts: 62
Default trust fund - how does it work

Does anyone know what a trust fund is? How does a trust fund work?
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Old 08-18-2008, 07:41 PM
trent trent is offline
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Join Date: Jun 2008
Posts: 387

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
No debt
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Old 11-25-2008, 02:45 PM
dreamy dreamy is offline
Join Date: Jun 2008
Posts: 34

So basically it is designed for people with a lot of money. Do you save on taxes using trust fund?
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