What should you know about income trusts?

Here’s what you should know about income trusts and how they work. Income trusts hold assets that generate income and can be structured as personal trusts or publicly-traded trusts that issue shares, such as real estate investment trusts (REITs).

What is a corporate income trust?

REITs are the most common corporate income trusts. They offer publicly traded shares on the open market and build a portfolio of income-paying real estate investments. Trust funds are a personal investment tool often utilized to manage family assets and structure inheritances. An income trust will hold income-producing assets.

What is a private income trust?

Individuals can create private income trusts for themselves and their families. Some trusts, such as real estate investment trusts (REITs), sell tradable shares accessible to the public. Generally, the purpose of a trust is to earn and distribute income consistently.

What is a trust fund?

A trust fund is the actual account or legal entity that assets are placed into, while a trust is the legal agreement that creates the fund. The terms are often used interchangeably. Trust fund accounts can hold assets including bank accounts, real estate, tangible personal property, stocks and bonds, and digital assets.