What are trust funds? A trust fund is an arrangement of assets to be given to a beneficiary at a certain time or after a particular incident. It does not only include cash but other assets such as, land properties, stocks, bonds and other financial possessions that can be transferrable, can also be included.
What are trust funds for? Trust funds for children are the most popular. It is usually given to a child when he reaches the legal age. It is mostly activated when the grantor dies. A common type of trust fund provides a specific amount of money every year to be used for the child’s expenses until he matures. After the child turns to a specific age, mostly at 21 years old, he can withdraw the rest of the money if he wants or extend the trust fund. Another type of trust fund, allows the guardian or the trustee to withdraw a specific amount aside from the annual income given for the child, for other expenses of the child. After the child turns 21, he can withdraw the remaining amount. More helpful tips on being succesful can be found at Make Everyday A Great Day.
What are trust funds’ trustees? A trustee is someone who manages the funds for the beneficiary. This is usually the parent if the trust fund was given by someone other than the parent, like the grandparent. For other trustees, they can be the aunts, cousins and sometimes a close friend of the grantor. The trustee should be trustworthy and honest. A lot of the trustees become abusive and tend to think of their own personal interest rather the child’s own needs. That is why, to avoid abuse, trustees are now given compensations amounting to a specific amount or a percentage of the beneficiary’s annual income. This will hopefully lessen thee greed and temptation of the trustee. Accounting from the trustee is sometimes asked after the trust ends. This is to ensure that the right amount is spent on the child’s care.
What are trust funds’ other types? Social security trust funds are operated by the government, taken from tax contributions of workers. Beneficiaries are usually the retirees, dependents and the disabled. When the worker retirees or has become disabled, he is given a specific amount every month or every year to cover for his expenses, since he will not be having any more salaries. If the worker dies, unless specified, his living dependents are usually the beneficiary. They are given annual income to provide for their expenses.