The term trust fund refers to the total assets which are held in a trust. These include assets placed in the trust by the trustor and returns on the investment of those assets accumulated after the creation of the trust.
Many different kinds of assets can make up a trust fund. Liquid assets including cash, bank account balances, bonds, shares, real estate, motor vehicles and fine art are among the assets which can comprise trust funds.
A trust fund is established by the creation of a trust. A trust is created when a person or entity (the trustor) transfers ownership of some of their assets to another person or entity (the trustee) by writing a trust deed.
The trust deed lists the assets which will comprise the trust fund, the terms and conditions under which those assets may be invested by the trustee in order to grow the trust fund, and the trust beneficiary (or beneficiaries) who will receive benefits derived from the trust fund from the trustee.
In Switzerland, assets which make up the trust fund of a revocable trust are considered part of the trustor’s personal wealth for wealth tax purposes. Assets which make up the trust fund of an irrevocable trust are considered to be the trust beneficiary’s personal wealth for wealth tax purposes.
Swiss law only governs common law trust funds insofar as they relate to foreign trusts established in countries with common law legal systems. Swiss civil law does not make allowances for the creation of trusts in Switzerland.