The phrase “trust fund” often brings to mind a particular type of person, namely someone who comes from a wealthy family with an excessive amount of money available to spend on luxury and frivolity. Although there are families who have that kind of generational wealth that’s passed down to them through a trust fund, it’s not as common as you may think. In fact, as a Trumbull trust and estates lawyer, I see more families with a modest amount of financial assets that are using trust funds for various reasons.
Generally speaking, a trust allows a grantor to contribute property that will be held by a second party for the benefit of the beneficiary. The person who manages the trust, known as the trustee, is often a trusted family member, an attorney, or a financial advisor. In some cases, there may be more than one trustee, referred to as co-trustees. The beneficiary or beneficiaries of a trust can be anyone to whom the grantor wishes to transfer assets.
The conditions for the distribution of the property are contained in the trust document. Usually, these conditions refer to a specific date, like the beneficiary’s 25th birthday, or a specific event, such as graduating from college or getting married. Some trust documents may not be as specific, containing broad language that allows the trustee to distribute the funds using their own discretion.
Depending upon your family’s situation, you may want to set up a trust for a specific purpose. For example, a special needs trust is designed to protect beneficiaries with disabilities. A spendthrift trust, on the other hand, is intended to prevent beneficiaries from spending the funds from the trust too quickly. A trust fund is also an option for setting aside funding for a specific purpose like paying for college or covering healthcare expenses.
Regardless of your financial status, a trust fund can be a valuable tool for protecting you and your family. You don’t need to be a millionaire or own multiple businesses and properties to benefit from having a trust established. Because your specific situation influences which type of trust would be most appropriate, your best bet is to consult with an estate planning attorney. An attorney who focuses on this area of the law will be more familiar with the various options and can guide you in making the right decisions. If you’re ready to learn more or get started, our attorneys are here to help. Simply call our office at (203) 877-7511 to schedule a consultation with a Trumbull trust and estates lawyer.
