Trust Fund Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Trust Fund, written in plain English, along with examples of how it is used.

What is Trust Fund?

It is the fund held in trust in form of either real property or monies and securities formed by the way of profits and donors collection.

History and Meaning of Trust Fund

A trust fund is a type of fund that is created as a way of holding and managing assets for the benefit of one or more individuals or organizations. The assets can be held in various forms including, cash, stocks, bonds, real estate, and other types of assets. These funds are usually established by individuals or organizations wanting to provide for their beneficiaries in the future.

Trust funds have been used throughout history as a way for individuals and organizations to protect and preserve their assets for the benefit of future generations. In the United States, the concept of a trust dates back to English common law, and trusts have become an integral part of estate planning and wealth management.

Examples of Trust Fund

  1. A wealthy individual sets up a trust fund for their children to receive a portion of their estate after their passing.
  2. A non-profit organization establishes a trust fund to provide financial support for a specific cause or mission.
  3. A scholarship fund is created to provide funding for students to attend college.
  4. A trust fund is established to provide for the care and maintenance of a piece of property or artwork.

Legal Terms Similar to Trust Fund

  1. Estate Planning - the preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death.
  2. Will - a legal document which outlines how an individual's assets will be distributed after their death.
  3. Beneficiary - an individual or organization who receives assets or funds from a trust or will.
  4. Fiduciary - a person who holds a legal or ethical relationship of trust with another person or organization.