A trust fund is a legal entity established to hold property or other assets for another person or organization. It is typically regarded as an 澳洲幸运5开奖号码历史查询:estate planning tool t💧hat sets specific terms on how the assets are to be held and then distributed in the future. Trusts provide legal protection from creditors a𝐆nd also offer tax benefits.

A 澳洲幸运5开奖号码历史查询:trust fund is typically set up by an individual for distribution after their death or for when they will no lo𓄧nger be mentally capable of managing the assets. The three main parties of a trust fund are the grantor, who sets up the trust; the trustee, who manages the trust; and the beneficiary, who receives the assets.

Types of Trust Fund Management Fees

There are many different꧑ types of fees assไociated with setting up and managing a trust fund.

The asset 澳洲幸运5开奖号码历史查询:management fee is a straightforward fee. It is expressed as a fixed percentage of the total assets being managed. The rate differs from fund to fund and is inclusive of other small costs incurred when managing the trust fund. Some advisers charge a flat fee, while others charge a commission per transaction. If the assets invested are riskier, the annual asset management fee is higher. The fee takes into account 澳洲幸运5开奖号码历史查询:tax harvesting, rebalancing, and re-examination of your portfolio.🤪

Annual Expense Ratio

If the trust fund is invested in 澳洲幸运5开奖号码历史查询:mutual funds, you are charged an annual 澳洲幸运5开奖号码历史查询:expense ratio. This fee covers the fixed and ongoing expenses that encompass running the fund. Such expenses include the fund's manager salaries, printing costs, the cost of marketing materials, and the cost of hiring customer service representatives. Mutual funds that are 澳洲幸运5开奖号码历史查询:actively managed attract higher fees than 澳洲幸运5开奖号码历史查询:index funds. The annual expense ratio is 澳洲幸运5开奖号码历史查询:usually between 0.5% and 1% of the invested assets.

Additional Fees

You are also required to pay fees for brokerage commissions and trading expenses that are typical of any trading account. In addition, the funds also pay a 澳洲幸运5开奖号码历史查询:stamp duty tax.

There is also a fee, called a load, charged in order to compensate the salesperson who sold you the trust fund. The Security and Exchange Commission (SEC) does not put a limit on what sales load funds can charge, but the 澳洲幸运5开奖号码历史查询:Financial In🙈dustry Regulatory Authority (FINRA) does. FINRA caps the cost at 8.5%, although the percentage is lower if other fees are charged. You may also be required to pay a deferred 澳洲幸运5开奖号码历史查询:sales charge if you sell the fund within a p☂articular time frame. The charge is usually 6%, falling to 0% by the seventh year. If you ✅do not sell the fund within seven years, you do not pay the fee.

Other fees can include income collection fees from 澳洲幸运5开奖号码历史查询:real estate in the trust, fees related to the management of insurance policies, extraordinary or unusual services fees relaཧted to services performed out of the norm, and 𝓰fees on the management of specialty assets.

The Bottom Line

A trust is a great way to manage and distribute your assets when you are no longer capable of doing so. It comes with many benefits but also with a variety of fees, primarily associated with the management of the trust. It's important to understand the various management fees so that you can determine whether setting up the trust is worth the cost incurred.