what is a trust fund?

Answer 1

A trust is a legal document where one person transfers money for the benefit of a third person to a trustee.

As an example, imagine your parents wanted to be sure your family was always taken care of. They could go to a trust company, or a trusted private person, and give them ownership of their money, house and private assets such as cars and stocks. The trustee would be responsible for taking care of your parents, should they become disabled, may be responsible for managing their money while they are well, and then become responsible for caring for their children, potentially for the life of the child.

A trust fund is just the money portion of the trust. It permits the settlor to have their money managed while alive, and the children to have the money managed when they die. It also prevents the common experience of children burning through money quickly because they do not know how to handle it.

Answer 2

A trust fund is a account that you can sometimes people put their inheritance in. That that got from a few generations above you.