Trust and Trust Fund are often used interchangeably, but there is a subtle difference between the two.
A Trust is a fiduciary arrangement where one person (the grantor or settlor) gives another person or entity (the trustee) the right to hold assets for the beneficiary. Trusts can be used for various purposes, including estate planning to avoid probate, asset protection, tax planning, charitable giving, and providing for beneficiaries with special needs.
A Trust Fund is an account or collection of assets held within the trust arrangement. Trust accounts can hold different types of assets, such as bank accounts, personal property, stocks, or other investments. The trustee manages the trust fund according to the instructions in the trust document.
The core difference is that a trust is the legal framework, while the trust fund is the container holding the assets governed by that framework.