Assets held in trust by a trustee for the benefit of named beneficiaries. While colloquially referring to financial assets, legally a trust fund encompasses all property transferred to and held by a trust, including real estate, securities, business interests, or any other property.
A trust fund is property held in trust for someone's benefit. Despite the name, it's not always just money or funds—it can include houses, stocks, businesses, or anything else owned by the trust for the beneficiaries.
⏱ When you'll encounter this term
- Estate planning for children or grandchildren
- Wealth transfer across generations
- Providing for beneficiaries over time
- Popular culture references to inherited wealth
"Grandma left a trust fund for each grandchild—$100,000 invested in index funds, managed by a trustee who distributes money for our education and living expenses until we turn 30, then we get the remainder."
⚖️ Compare: Trust Fund vs Direct Inheritance
Managed by trustee. Distributed over time or conditionally. Protected from beneficiary's poor decisions or creditors.
Received outright. Given all at once. No ongoing management or protection.
💡 Did you know?
The phrase "trust fund kid" has become cultural shorthand for someone who inherited wealth, but trust funds aren't just for the ultra-wealthy. Many middle-class families use modest trust funds to provide for children's education or protect inheritances from immature spending.