In the simplest terms, a trust fund is a legal arrangement or contractual agreement formed by The Grantor for the benefit of The Beneficiary and administered by The Trustee.
The trust can be made up of real property, stocks, bonds, real estate, businesses, or other items of value. The trust is a legal fictional entity created within the guidelines of the state in which it is created. Once established, The Trust can be used to minimize estate tax and allow you to protect your family assets for future generations.
In the case of a Charitable Annuity Trust or Charitable Remainder Trust, it is possible to benefit your favorite charity (even one that you establish) while shielding assets in The Trust from tax liability.
Long considered an instrument only for the rich and powerful, trusts are useful for anyone with assets to protect who wished to make them available to family or friends.
Creating a Trust Fund
The creation of a Trust Fund, consists of three parties: The Grantor, The Beneficiary, and The Trustee.