What is a trust fund?

A trust fund is a legal arrangement in which money or other assets are held by one person or institution (the "trustee") for the benefit of another person (the "beneficiary"). Trust funds are commonly used in Elder Law in North Carolina. They are set up for a variety of purposes, such as providing long-term financial support for a disabled or elderly individual, enabling what is known as “spendthrift” protection of assets, providing supplemental income, or providing a way to maintain control of assets after death. Generally, when a trust is established, property is transferred from one person to a trustee for the benefit of another. The trust sets out the terms and conditions under which the trustee is to manage the assets and distributes the income or assets to the beneficiary as specified in the trust document. Assets that may be held in a trust include cash, investments, real estate, or personal property. Trust funds may be revocable or irrevocable, depending on the terms set out in the trust document. A revocable trust allows the person who created the trust to modify or terminate it at any time during their lifetime. An irrevocable trust cannot be modified or terminated by the trustor and must remain in effect until the terms of the trust are fulfilled.

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