People often associate trust funds only with the wealthy, but a trust fund (“trust”) actually can be an effective financial tool for many people in many circumstances.

A trust is a separate legal entity that holds property or assets of some kind for the benefit of a specific person, group of people or organization known as the beneficiary (beneficiaries). The person creating a trust is called the grantor, donor or settlor. When a trust is established, someone is designated to oversee or manage the assets in the trust. This person is called a trustee. He or she can be a professional with financial knowledge or a relative or loyal friend.

Benefits of

establishing a trust

Whether it makes sense to establish a trust depends on your individual circumstances. Some common reasons for setting up a trust include:

To provide for minor children or family members who lack financial experience or who are unable to manage their assets

To provide for management of your assets should you become unable to oversee them yourself

To avoid probate and transfer your assets immediately to your beneficiaries

To reduce or otherwise provide for payment of estate taxes

Keep in mind that you may not need to establish a trust to accomplish these and other financial goals. A well-written will may distribute your assets appropriately. Check with a lawyer before deciding if a trust is right for you.

For more information on establishing a trust fund, write for a free booklet from the Consumer Information Center, Dept. 589D, Pueblo, CO 81009.


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