For most people, when they hear the term "trust fund," they think of the uber-rich and people who never have to work a day in their lives. Thankfully, that's just not true! There are some great and easy ways to get a trust fund set up even if you don't own a summer home in the Hamptons.
Trust funds are accounts that are set up for specific beneficiaries with certain guidelines, and they're more available than you think. A trust fund can be a great vehicle if you have a sum or money or an asset, like real estate, and you want to pass it along to someone else in monthly portions instead of one lump sum. A trust can be set up, and the beneficiary will receive monthly allotments from the funds or dividends from the asset. Those resources can even be allocated for certain things only, such as education.
There are a few things that are important to consider. Once you set up a trust fund, it's permanent and are irrevocable. You no longer own those assets, and the trustee, usually a bank or attorney, distributes the funds. Since you do not own the funds, you do not personally pay income tax on them, and trust funds can be structured to have reduced taxes for the beneficiary. Trust funds do not have to be for a large fortune, but they can be a valuable tool to create a specific legacy for someone you love.
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