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Fact or Fiction: Trust Funds
by Staff
The term "trust fund" might conjure up images of spoiled rich kids living high on their parents' money, but there's more to trust funds than that. Whether you're considering setting up a trust for your children or hoping a long-lost relative will set one up for you, our quiz will test your knowledge of how these funds really work.

Fact or Fiction: Trusts are governed by federal law.

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Fact or Fiction: There are two main roles to be fulfilled in any trust: grantor and beneficiary.

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Fact or Fiction: Trustees are not liable for financial losses incurred from mismanagement of assets in a trust.

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Fact or Fiction: Trusts are more complicated than wills.

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Fact or Fiction: A trust does not protect assets from creditors.

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Fact or Fiction: Assets in a trust for a child must be distributed when the child turns 18.

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Fact or Fiction: If you create a trust for a child and put assets in the child's name, you can't get them back.

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Fact or Fiction: An individual cannot put assets in a testamentary trust while he or she is alive.

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Fact or Fiction: A charitable trust can last indefinitely, but a private trust cannot.

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Fact or Fiction: The grantor of a living trust can also be its beneficiary.

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Fact or Fiction: Revocable trusts are much more flexible than irrevocable trusts, but offer fewer tax benefits.

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Fact or Fiction: In relation to trusts, the term "property" refers mainly to real estate.

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Fact or Fiction: If you receive income from assets in a trust, you must pay taxes on it.

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Fact or Fiction: If the beneficiary of a living trust dies, the property and assets must go to a contingent beneficiary.

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Fact or Fiction: Transferring a car into a trust can create problems.

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Fact or Fiction: A living trust written in one state will still be valid in another state.

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Fact or Fiction: Most living trusts are revocable.

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Fact or Fiction: A living trust makes a will unnecessary.

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Fact or Fiction: Trusts can help people avoid probate.

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Fact or Fiction: A trustee may be charged with distributing income to a beneficiary, but is never responsible for making decisions about how the income should be distributed.

  • Fact
  • Fiction