A common example of a private-purpose trust fund is a state-sponsored 529 savings plan, structured such that parents make after-tax contributions to an investment fund managed by the state government.

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A 529 savings plan is a type of trust fund that is set up for the specific purpose of funding education expenses, making it a private-purpose trust fund. The contributions are made after-tax and are managed by the state government.

A Common Example of a Private-Purpose Trust Fund Is a State-Sponsored