In an uncertain economic climate, finding a way of ensuring future financial security for your family provides much needed peace of mind. A trust fund is a long-term strategy for holding and managing assets over a period of time, until another person is able to benefit from the money at some later date.

In an uncertain economic climate, finding a way of ensuring future financial security for your family provides much needed peace of mind. A trust fund is a long-term strategy for holding and managing assets over a period of time, until another person is able to benefit from the money at some later date.

A trust fund is comprised of three parties: the grantor, the trustee and the beneficiary. The grantor sets up the fund, the trustee manages it, and the beneficiary is the eventual recipient of the fund's accumulated assets. Funds can vary in terms of complexity and administration. There may be more than one beneficiary or the trustee may have a more detailed role to play running the fund.

A trust fund is a versatile financial plan and can involve a range of assets and instruments, including:

Cash

Property

Stocks & bonds

As a grantor, it's important to be aware of the details and charges involved in your fund when you appoint a trustee. In the past trustees were not necessarily due any financial recompense - but this has changed in recent times. Many schemes now include some degree of annual compensation in exchange for running the trust fund.

Why a trust fund?

When you set up such a fund, you have an assurance that your beneficiaries will receive money in a way which you deem suitable. This can mean children benefit from the fund at a predetermined age - when they are mature enough to use the money responsibly. Before a fund is made available to its beneficiary, it might be used by the trustee to cover other costs, such as the beneficiary's education, clothing or maintenance.

Despite recent changes in the law, funds remain an attractive way of protecting money and assets from creditors and tax regulations.

What are my options?

There are many different types of fund available. Perhaps the most well-known is a Child Trust Fund, which can be used to provide for children at a time later in their adult lives for example fo University Fees or a first house deposit. Funds might also be set up to provide income for minors, or even provide for yourself if, for any reason, you are no longer able to manage your own assets. Trust funds can prove useful in estate planning since they provide an easy way to transfer assets when you die.

One common misconception about trust funds is that they are only for rich people. There are plenty of funds out there that cater to a range of income brackets and budgets. Again, it's important to be aware of the costs and options available to you before you make any decisions.