Which term refers to the actual assets held within a trust?

• A. Corpus
• B. Estate
• C. Principal
• D. Funds

Answer: (C)

The assets that a trust actually holds are the trust’s principal—the underlying property that makes up the trust fund. This is the base amount from which income is generated and from which distributions are drawn. In trust accounting, principal is used to denote the assets themselves, with income being the earnings produced by those assets. Estate refers to property from a deceased person, not the ongoing assets of a living trust. Funds is a generic term that lacks the technical sense of the trust’s underlying assets. Corpus is a precise synonym for the trust’s assets in some contexts, but the term most commonly aligned with the standard classroom phrasing here is principal, making it the best fit.