The Basics Of A Trust Fund You Should Know About - Total Wealth Planning

The Basics Of A Trust Fund You Should Know About

Total Wealth Planning

A trust fund is a special kind of estate planning which enables one to grant their wealth to another person who can be their spouse, children, grandchildren or anyone they nominate. A trust fund basically includes a variety of assets, which is not limited to tangible assets, which means bonds, stock investments and cash can all be underwritten as a trust fund. Another difference between a will and a trust fund is that the latter can be revoked at any point.

However, as the property can only be passed on to the heirs after the death of the granter in a will, trust funds go into effect the moment they are signed. To understand more about trusts funds and the role they play in estate planning, it is important to learn about the three significant parties involved in a typical trust fund contract.

Key Parties

The three people described below play the most vital roles in the property distribution arrangement:

The Grantor

The grantor is the one who creates the trust fund by donating a considerable amount of property to the fund. The property can either be physical assets such as real estate, lands, art and any other tangible asset. Intangible or financial assets such as cash, bonds, mutual funds, stock investments, copyrights and even business shares can be donated into a trust fund. The grantor also selects the person who would manage the fund until the time they want it to be distributed.

The Beneficiary

It is the individual for whom the trust fund was generated with the motive that that the assets donated in the fund will be accessible to the beneficiary. Although the beneficiary can’t directly own the assets, they are still managed in a manner by the trust that it shall benefit the nominated person for the longest time. The grantor has full authority over who they name as a beneficiary and how each heir shall be given access to their trust fund.

The Trustee

A trustee can be either a single person, a group of people or an institution selected by the grantor to handle the trust fund on their behalf. Legal advisors and close family members are the most common people chosen as trustees since the grantor feels more secure having the trust fund in the hands of a legal expert or a close relative. The trustee must religiously abide by the rules documented in the trust and the concerning law.

Estate planning is a very important life decision and must be executed carefully, trust funds are a common type of asset planning that makes sure that the property goes to only the person you want it to. To learn more about how you can create a trust fund and streamline your inheritance process contact Total Wealth Planning in Cincinnati, OH. The expert team of wealth advisors will help you find the perfect solution to your estate planning worries.

Author: David D. Wilder, CFP® is a principal and chief investment officer at Total Wealth Planning, a fee-only fiduciary financial planning firm in Cincinnati (Blue Ash), Ohio. With over 30 years of experience, Dave leads the Firm’s Investment Policy Committee and Investment Management Team. As a highly-credentialed MST, CFP®, CTFA, and CEPA, Dave has been featured in numerous industry publications including Yahoo finance, the Business Courier, and Channel 12 Cincinnati News. Dave has been recognized as a Five-Star Advisor through Paladin Registry, a 2008 Reuters Top Advisor, profiled in Bloomberg Business Week magazine, and in 2011 was named one of the Top 50 Most Experienced Advisors in the United States. Dave can be reached at dave@twpteam.com.

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