What Are Trust Fund Statutes? Why Paying Subs Can Be a Fiduciary Duty

Construction trust fund statutes — in effect in roughly half of US states — convert a GC's obligation to pay subs and suppliers into a fiduciary duty. Funds the GC receives from the owner are held 'in trust' for downstream payment. Misusing trust funds can pierce the corporate veil, create personal liability for owners and officers, and even trigger criminal charges. Here is how construction trust fund statutes work and why they matter for anyone running a construction company.