• Unit trusts are unincorporated mutual funds that pass profits directly to investors rather than reinvesting in the fund.
• The investor is the trust's beneficiary.
• Fund managers run the unit trust and trustees are often assigned to ensure that the fund is run according to its goals and objectives.

A unit trust's success depends on the expertise and experience of the company that manages it. Common types of investments undertaken by unit trusts are properties, securities, mortgages, and cash equivalents. The term “unit trust” is also used in the United Kingdom (U.K.) as a mutual fund, which has different properties than mutual funds in the United States.

A unit trust is a type of collective investment packaged under a trust deed. Unit trusts provide access to a vast range of securities. These are offered in Guernsey, Jersey, Fiji, Ireland, New Zealand, Australia, Canada, Namibia, Kenya, Singapore, South Africa, the U.K., the Isle of Man, and Malaysia. The exact definition of what a unit trust is in these jurisdictions varies. In Asia, for example, a unit trust is essentially the same as a mutual fund. In Canada, a unit trust is an unincorporated fund that is set up specifically to allow income to flow through to investors. However, in Canada, these investments are more commonly called income trusts.

The underlying value of the assets in a unit trust portfolio is directly stated by the number of units issued multiplied by the price per unit. It is also necessary to subtract transaction fees, management fees, and any other associated costs. Determining management goals and limitations depends on the goals and objectives of the investment of the unit trust.

In unit trust investments, fund managers run the trust for gains and profit. Trustees are assigned to ensure that the fund manager runs the trust following the fund’s investment goals and objectives. A trustee is a person or organization that's charged with managing assets on behalf of a third party. Trustees are often fiduciaries, meaning the interests of the beneficiaries of the trust must come first and as part of that responsibility, a trustee's job to safeguard the assets of the trust.

Owners of unit trusts are called unit-holders, and they hold the rights to the trust’s assets. Between the fund manager and other important stakeholders are registrars, who simply act as middlemen or liaison for both parties.

• A trust fund is designed to hold and manages assets on someone else's behalf, with the help of a neutral third-party.
• Trust funds include a grantor/settlor, beneficiary, and trustee.
• The grantor/settlor of a trust fund can set terms for the way assets are to be held, gathered, or distributed.
• The trustee manages the fund's assets and executes its directives, while the beneficiary receives the assets or other benefits from the fund.
• The most common types of trust funds are revocable and irrevocable trusts, but several other variations exist for specific purposes.

There are three key parties that comprise a trust fund, a grantor/settlor (sets up a trust and populates it with their assets), a beneficiary (a person chosen to receive the trust fund assets), and a trustee (charged with managing the assets in the trust).

The primary motivation for establishing a trust fund is for an individual or entity to create a vehicle that sets terms for the way assets are to be held, gathered, or distributed in the future. This is the key feature that differentiates trust funds from other estate planning tools. Generally, the grantor/settlor is creating an arrangement that, for a variety of reasons, is carried out after they are no longer mentally competent or alive.

The creation of a trust fund establishes a relationship where an appointed fiduciary the trustee acts in the sole interest of the grantor/settlor. A trust is created for a beneficiary who receives the benefits, such as assets and income, from the trust. The fund can contain nearly any asset imaginable, such as cash, stocks, bonds, property, or other types of financial assets. A single trustee can be a person or entity such as a trust bank managing the fund in a manner according to the trust fund's stipulations. This usually includes some allowance for living expenses and perhaps educational expenses, such as private school or college expenses.

There are numerous types of trust funds, but the most common are revocable and irrevocable trusts. A trust fund can contain a surprisingly complex array of options and specifications to suit the needs of a grantor/settlor. Wealth and family arrangements can grow quite complicated when millions (or even billions) of dollars are at stake for multiple generations of a family or entity. In addition to the common revocable and irrevocable trust arrangements, there are numerous other types of trust funds. A tax or a trust attorney may be your best resource for understanding the intricacies of each of these trust funds.

• In Australia, the trust fund is a key structure to make sure individuals safely pass on their assets to their chosen beneficiaries.
• A trust is a great tool for separating a person's assets from their estate or portfolio, effectively shielding those assets from creditors in bankruptcy proceedings or plaintiffs in lawsuits.
• The assets in a trust may contain stocks, bonds, cash, real estate, antiques, and fine art.

The word trust is an umbrella term used to signify a variety of structures, each with its own specific procedures, regulations, and tax considerations. But fundamentally speaking, a trust is a private legal arrangement in which the ownership of one’s assets such as stocks, bonds, cash, real estate, antiques and fine art are parked in an account that's managed by an individual or group of individuals for the benefit of another person or persons.

The individuals who originally provide the assets are generally referred to as settlors. Those who are charged with managing trusts and distributing their assigned assets are known as trustees.

Finally, those who ultimately receive the assets contained within the trusts are known as beneficiaries.

Trusts are mainly created to separate a person's assets from their personal estate. Once a settlor assigns those assets to a trust, they no longer own them, effectively shielding the assets from creditors in bankruptcy proceedings or plaintiffs in lawsuits.

Other reasons for creating a trust include:

• Controlling the assets of individuals who are too young or incapacitated to handle their own financial affairs.
• Protecting spendthrifts from squandering their fortunes.
• Managing and distributing pension/retirement funds during an individual’s employment years.

Australia recognizes the following different types of trusts: