Which statement is TRUE regarding private-purpose trust funds?

Private-purpose trust funds are specifically established to benefit individuals, organizations, or other entities rather than serving a broad public purpose. This characteristic differentiates them from public trust funds, which are designed for broader community benefits.

The statement highlighting that private-purpose is best understood as the absence of a public purpose accurately captures the essence of these funds. They are created with the intent to provide benefits to designated beneficiaries based on specific criteria, rather than for the general welfare of the public.

Moreover, the notion that specific benefits accrue to specific individuals aligns with the purpose of private-purpose trust funds. The funds are typically created to provide financial support or resources to particular beneficiaries, emphasizing a focus on individual rather than collective benefit.

Additionally, the lack of discretion on the part of the government regarding the amount that accrues to specific individuals is a significant aspect of these funds. Once the conditions for distribution are set forth, the government generally administers the fund according to those specific terms, leaving little room for variation in how the funds are allocated.

These statements collectively illustrate the key characteristics of private-purpose trust funds and underscore that all of the statements accurately reflect those traits.