What kind of investments are allowed in a trust?
In Washington, trusts are legal agreements that allow someone to control investments for a period of time, usually for the benefit of a beneficiary. The types of investments allowed in a trust are determined by the trustor, the person creating the trust, and the trust document. The most common types of investments allowed in a trust are stocks, bonds and mutual funds. These investments are attractive because of their potential to provide capital appreciation and income over time. Other investments that may be allowed and recommended for a trust are real estate, private equity or hedge funds, money market accounts, certificates of deposit, and commodities. Trusts also allow for more complex investments, such as venture capital funds, private placement equity and limited partnerships, which can help diversify the trust. The trustor must be aware of the associated risks of these investments, as well as any tax implications. The trustor should also be aware of any applicable laws in Washington when investing in the trust. These may include laws governing the disposition of the trust assets, when and how to distribute trust assets, and any tax implications. Trusts are a great way to manage investments, but trustors must take the time to research and understand the various investment options available to them in Washington. With the right advice and guidance, the investments in a trust can be a safe and secure way to preserve and grow wealth.
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