Trust Fund

A Trust Fund is a fund created by a settlor and transferred to a trustee who will be legally obligated to hold the funds and act in the interest of a beneficiary as specified in a trust agreement.

• AKA: Trust.
• Context:
  • It can be comprised of properties and/or a variety of assets.
• Example(s):
  • a Government Trust Fund, such as a U.S. Old-Age & Survivors Insurance Trust Fund or a municipal trust fund.
  • …
• Counter-Example(s)
  • Fiduciary Fund.
• See: Common Law, Property, Settlor, Trustee, Beneficiary (Trust), Ownership, Title (Property).

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References

2016

• (Wikipedia, 2016) ⇒ http://en.wikipedia.org/wiki/Trust_law Retrieved 2016-10-30
  • A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a settlor, who transfers property to a trustee. The trustee holds that property for the trust's beneficiaries. Trusts exist mainly in common law jurisdictions and similar systems existed since Roman times.

An owner of property that places property into trust turns over part of his or her bundle of rights to the trustee, separating the property's legal ownership and control from its equitable ownership and benefits. This may be done for tax avoidance reasons or to control the property and its benefits if the settlor is absent, incapacitated, or dead. Trusts are frequently created in wills, defining how money and property will be handled for children or other beneficiaries.

The trustee is given legal title to the trust property, but is obligated to act for the good of the beneficiaries. The trustee may be compensated and have expenses reimbursed, but otherwise must turn over all profits from the trust properties. Trustees who violate this fiduciary duty are self-dealing. Courts can reverse self dealing actions, order profits returned, and impose other sanctions.

The trustee may be either a individual, a company, or a public body. There may be a single trustee or multiple co-trustees. The trust is governed by the terms under which it was created. In most jurisdictions, this requires a contractual trust agreement or deed.

• (FCAC,2016) ⇒ Financial Consumer Agency of Canada (2016) - Glossary: http://www.fcac-acfc.gc.ca/Eng/resources/Pages/glossary-glossair.aspx#trust Retrieved 2016-10-30
  • Trust - An arrangement under which money or other property is held by one person or company (often a trust company) for the benefit of another person or persons. These assets are administered according to the terms of the trust agreement. Each province has a trustee act, which regulates the kinds of investments that can be made by the trustees of a trust fund.

• (City Council of Barnstable, 2016b) ⇒ Town of Barnstable. (2016). “Town of Barnstable Adopted Operating Budget - 2017."
  • QUOTE: Trust fund: In general, a fund for money donated or transferred to a municipality with specific instructions on its use. As custodian of trust funds, the treasurer invests and expends such funds as stipulated by trust agreements, as directed by the commissioners of trust funds or by town meeting. (See Expendable Trust and Non-Expendable Trust)

2014

• (Investopedia, 2014) ⇒ http://www.investopedia.com/terms/t/trust-fund.asp
  • QUOTE: A trust fund is a fund comprised of a variety of assets intended to provide benefits to an individual or organization. The trust fund is established by a grantor to provide financial security to an individual, most often a child or grandchild - or organizations, such as a charity or other non-profit organization.

2008

• (MA DoR, 2008) ⇒ Massachussets DoR. (2008). “Municipal Finance Glossary.” Massachussets Department of Revenue - Division of Local Services
  • Trust Fund – In general, a fund for money donated or transferred to a municipality with specific instructions on its use. As custodian of trust funds, the treasurer invests and expends such funds as stipulated by trust agreements, as directed by the commissioners of trust funds or by town meeting. Both principal and interest may be used if the trust is established as an expendable trust. For non-expendable trust funds, only interest (not principal) may be expended as directed.

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