People think trust funds are money that rich spoiled brats get to live on. Actually, trust funds are a lot less impressive in most situations.

“Trust fund” is basically often used as just another term for the “trust corpus.”  Corpus is the assets being held in the trust. 

The trust fund often makes money.  Brokerage accounts held in the trust may get dividend payments that go to the trust as income.  Either the trust or the beneficiaries will have to pay income tax on the income the trust gets during the year.

We talk about “funding” the trust when it is set up.  It is critical that your living revocable trust is funded.  Ownership of the assets you have to sign your name on need to be owned by the trust in order to avoid probate after your death.  That’s why you set up the trust, but unless you fund all of those types of assets into the trust, your trust is a waste.

The trust fund is obviously under the management of the trustee.  The trustee’s obligation is to manage the trust fund for the benefit of the beneficiaries. 

Don’t let the terminology of “trust funds” mess you up.  Check out my YouTube which goes into a lot more detail on trust funds.