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Understand the basics of trust funds

A trust fund is something that gives you control over what happens to your assets after you die. These funds, which are legal entities, enable you to set conditions on who will get what when. There are various types of trusts, so be sure that you work with someone who can help you learn which trusts are right for your needs.

When you establish a trust fund, you have to name a trustee. This is the person or entity that is responsible for making sure that the trust's business is taken care of. When you pass away, this is the person who will distribute the assets in the trust according to your directions. The trustee can be a person, a law firm, a bank or anyone you name.

On the paperwork establishing the trust, you are the grantor. You can put assets, investments, businesses and just about anything else you deem necessary into the trust. These assets are protected in the trust and will be used to benefit the beneficiaries.

The beneficiaries don't own the trust. Instead, they only reap the benefits of the assets in the trust. You can set stipulations on when the beneficiaries can get what is due to them. For example, you might set up a trust to pay for your grandchildren to go to college or to help support them when they buy a home.

One top of knowing what those three terms mean, you also have to learn about what the different types of trusts do. For example, an irrevocable trust can't be changed, but a revocable trust can be altered. This is only a sampling of what you need to consider when you are ready to establish a trust.

Source: FindLaw, "What Is a Trust Fund?," accessed June 14, 2017

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