 TITLE: What Is a Trust and How Can It Help Me? CONTENT: How Do Trust Funds Work?\n------------------------\nA trust fund is designed to ensure that a person's assets are held and managed for the benefit of another person, group of people or organization, with the assistance of a third party. There are three key parties to a trust fund: the grantor, the trustee and the beneficiary.\n*   **Grantor**: The person that sets up the trust fund and places their assets in it. The grantor also creates the rules for how the assets within the fund are managed, accumulated and distributed.\n*   **Trustee**: A third party who is tasked with managing the trust fund. The trustee has a fiduciary duty to the beneficiaries of the trust, which means they must act in the beneficiaries' best interests within the terms set by the grantor. A trustee can be any person or firm the grantor chooses.\n*   **Beneficiary**: The beneficiary of a trust fund can be an individual, a group of people or an organization. The grantor designs the trust for their benefit.\nTrust funds work differently from many other estate planning tools because they make it possible for the grantor to decide when and how their beneficiaries receive the assets meant for them.\nFor example, a grantor may choose to pay the beneficiary a set amount annually or provide a lump-sum payment when they reach a certain age. The grantor may also specify how the funds can be used, such as for college expenses or a home down payment.\nThe grantor may even prohibit certain uses of the trust fund assets. A common provision is the spendthrift clause, which prevents the trustee from distributing money to the beneficiary to pay off debts.\nFinally, a trust fund provides some protection for the assets within the trust. The property in the trust doesn't go through the probate process after the grantor dies, which can be time-consuming and expensive. Also, depending on the type of trust you set up, the assets the grantor places in it may be protected from their creditors. END