Video: Introduction to Fiduciary Funds

In this lesson, embark on a journey through the realm of fiduciary funds with Nick Palazzolo, CPA, who dives into the intricate world where governmental entities manage financial resources for the benefit of others. He skillfully breaks down the defining characteristics that separate fiduciary funds from other fund categories, illustrating a simplified three-step approach to identify these types of funds based on their purpose and use. By emphasizing the nature of fiduciary funds—where the government is in control but not the beneficiary—Nick clarifies the essence of these funds using examples such as pension plan funds and investment trust funds. He clarifies that despite external constraints, the government's role is one of a custodian rather than a direct beneficiary, ensuring that the funds are earmarked for specified parties.