How do you set up a trust fund for an inheritance?

Difference between inheritance and trust fund?

• OK so my aunt is setting up a trust fund for me, but also said her all her inheritance in her will, would probably all be taken away from Obama. So will he be able to take my trust fund money too, even tho it's in my name or is it different than a will.

• Answer:

  Your aunt is full of nonsense. Very very few people pay estate (inheritance) tax in the U.S., because the first five million dollars of inheritance are exempt from the tax. Unless your aunt has five million in the bank, this won't affect her estate in the slightest. (Also this is the United Kingdom board? So either you're asking in the wrong place or it's David Cameron you should really worry about.) There is an important difference between inheritance and a trust fund, though. Inheritance will have to go through the probate process, where your aunt's will might be challenged by anyone who held a debt against her at the time of her death, while a trust fund does not. In fact, the tax situation is probably worse for a trust fund, because you'll pay income tax on any money that you receive from the trust. I am not a real accountant. Find one.