Why You Should Set up a Trust Fund

Steven C. Beer is a lawyer with several years of experience. He studied law at the Villanova Law School and served as an editor at the Villanova Law Review. Steven C. Beer is presently a Lewis Brisbois Bisgaard & Smith LLP partner, and acts as a trustee for City Parks Foundation.

A trust fund is a fund set aside by the grantor and is entrusted to the trustee to manage to protect the asset and legally hold it on behalf of a beneficiary. A trust fund covers several assets ranging from real property, stocks, money, bonds, and businesses.

Asides from bestowing or keeping a particular asset on behalf of a beneficiary, setting aside trust funds has several other benefits. One of the key impacts of a trust fund is that it reduces the inheritance and the estate tax that the beneficiary will pay upon the death of the grantor.

Further, when you set up a trust fund, your beneficiaries do not have to go through the rigor of probate to determine the distribution of the trust because the trust fund specifically says who gets what. You should also note that creditors cannot seize a trust property to recover unpaid debt from the grantor.