What is a trust fund
A trust fund is the arrangement of a contract that ensures ones assets are fully protected under a number of circumstances. It can be established for the benefit of the third-party recipient, who can either be the owner’s children, a charity organization or a company.
To learn about trust funds and which offshore trust is right for you, please visit our Offshore Trusts page for more information.
A trust fund explained
A trust fund is a document drawn up that acts as a form of asset protection. This document details the trustor’s requirements and wishes, which are drawn up in a legally binding document.
It involves three parties: the holder of the trust – also known as the trustor; the establisher and administrator of the trust – also known as the trustee; and the individual or group who benefit from the trust, or the beneficiary. The main purpose of the fund is to protect one’s wealthy assets from strict tax laws and regulations. It also acts as a form of property protection, which, outside of a trust fund, is often subject to rigid legalities which can result in the surrender of property upon the death of the owner. A trust fund is therefore a solid form of protection for one’s assets.
There are a broad range of trust ‘types’ which can be chosen from during the creation of a trust fund. The fund that is finally chosen depends upon the desires of the trustor.
Dependent on the jurisdiction in which the trust fund is established, the fund will be subject to a number of limitations imposed on how the assets can be utilized. For example, some beneficiaries may not have access to any of the assets contained until they reach a certain age. Once the required age has been reached, there may also be limitations imposed on the amount of funds that can be withdrawn.
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