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Trust funds are more than deposit accounts that enable you to grant a person or organization money -- they are legal entities. The provisions for trust funds determine how different types operate. One thing all trust funds have in common is the existence of a grantor, a trustee, and a beneficiary. One person can serve in all three roles. Some people have shied away from trust funds because they believe they are exclusive to wealthy people. However, they are an effective way for anyone to establish an inheritance and preserve assets.

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1. What is a Grantor?

The person who sets up the trust fund and donates property is known as the grantor. This person also decides how the trust fund will be managed, including income and assets. The grantor typically names beneficiaries to a trust fund and has the power to change the beneficiary at his or her discretion.

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