Understanding Trust Funds: How They Work and Who They Benefit

A trust fund shelters people’s assets from probate and allows them to choose how and when their assets are distributed to their heirs. A trust must be set up as either revocable or irrevocable and have a grantor, at least one beneficiary, and a trustee. Depending on the type of trust fund, one or more of these parties may be responsible for paying income and/or estate taxes.