Is a Trust the Same Thing as a Trust Fund?

Image of plant in a container filled with coins. Photo by Visual Stories || Micheile on Unsplash.

No. The term “Trust Fund” is found more often on celebrity pages than in estate planning. Let me explain.

A Trust is an agreement between at least two people concerning certain assets. You need three things to set up a Trust:


  1. A person who creates the Trust (the “Trustor” or “Settlor”);
  2. An asset that the Trust controls (often referred to as a “Trust asset” or less commonly the “Trust res”);
  3. A Beneficiary—the person who will receive the Trust asset.


More than one person can be a Trustor for a Trust, such as when a married couple creates a Trust together. A Trust can govern more than one Trust asset at one time, and a Trust can have many Beneficiaries. But in order to be a legal Trust, you need at least one Trustor, one Trust asset and one Beneficiary. Also, in order to make a Trust work, there needs to be a Trustee to carry out the terms of the Trust, but this is not a legal requirement.

Don’t see the term “Trust Fund” in that list? That is because Trusts and Estate lawyers do not use that term to describe Trust assets.

A “fund” is defined as “a sum of money saved for a particular purpose.” The term “Trust Fund” is not a legal term to describe how wealthy people hold their money—it is a term created by journalists that suggests money that one person earned and that someone else gets to spend. Kind of like free money.

There are certain legal theories about Common Trust Funds, but these have to do with large corporate Trustees co-mingling the funds they manage. There are Trust Funds for pensions, building a highway or other community-wide purposes. However, these are probably not the kind of funds you associate with the term “Trust Fund.”

So, while some people use the term “Trust Fund” interchangeably with the term “Trust”, you will not see the term “Trust Fund” used on California Trusts Online pages because it does not have a legal meaning within California law, and we do not want to mislead or confuse you.


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