Trust funds are legal entities funded for a specific purpose.
Accounting for trust funds requires the separation of principal and income. When a trust fund is created, money is transferred to the Trustees as the initial corpus or principal of the trust fund. Additional capital may be added at a later time.
As the trust fund earns income and grows, interest and dividends earned by the trust fund are booked as "income." Short-term and long-term capital gains are booked as "principal."
Many trust funds restrict annual distributions to income alone. Some trust funds require a portion of the annual income to be reinvested in the trust fund as additional principal to offset inflation. An expendable trust fund allows for the withdrawal of income and principal as the trust fund's specific purpose dictates.Each trust fund is governed by an investment policy written specifically to provide an investment roadmap. There are two documents in Hampton:
Real Estate Trust Fund Investment Policy
Common Trust Fund and Common Capital Reserve Fund Investment Policy
When a trust fund has met its purpose, the principal is disbursed, although many Town trust funds never distribute principal. These are referred to as non-expendable trust funds. Click on the link below for greater detail about a specific trust fund:
- Campbell Sports Scholarship Fund
- Cemetery Burial Trust Fund
- Cemetery Perpetual Care Trust Fund
- Lane Memorial Library Trust Funds
- Poor Trust Funds
- Real Estate Trust Fund
Details about the National Advisors Trust portfolios may be obtained by contacting any of the trustees.