Who is the individual or party that benefits from a trust fund?

The designated beneficiary or beneficiaries are the individuals or parties who receive benefits from a trust fund. In a trust arrangement, the settlor establishes a fund, but the primary purpose of a trust is to provide financial benefits to the named beneficiaries. The beneficiaries are entitled to receive specified distributions from the trust, which could include income or principal, depending on the terms set forth by the settlor.

The trustee, although responsible for administering the trust and managing its assets according to the instructions laid out in the trust document, does not personally benefit from the trust. Their role is to ensure that the trust’s purpose is fulfilled and that the benefits reach the designated beneficiaries as intended. Similarly, the chief executive officer of the trust may have a management role, but they do not benefit from the trust unless they are also named as a beneficiary. The settlor, while instrumental in creating the trust, typically does not benefit from it if the trust is set up to benefit others. Thus, the correct choice highlights the focus of a trust’s purpose, which is to provision benefits to the specified individuals or parties.