Trusts are vital tools for planning your future. Initially, they were utilized by the ultra-wealthy but are now used by every socioeconomic class. A trust has many different aspects and roles. For instance, a settlor, also known as the grantor, is the person whose primary purpose is to create a trust.
Similarly, someone who manages that trust is called the trustee. If the trustee who receives control is deceased, a third person, called a successor trustee, benefits from this operation and the line of beneficiaries. To learn more about the differences between a settlor and a trustee and their important roles in a trust, contact our professional team of trusts attorneys at Amity Law Group today.
Trusts hold investments, property, and money. They are used to transfer assets upon death, eliminating probate costs. There are many types of trusts, both domestic and offshore, but they all generally fit into one of four classifications.
The first type is an irrevocable trust that cannot be changed and is typically used to fund legacies. The next is a revocable trust that can be added to and amended. A testamentary trust is included in wills. Lastly, a living trust can take effect anytime during the maker’s lifetime.
The settlor’s role is to legally transfer or plan for assets. In some types of trusts, settlors can be the beneficiary, the trustee, or even both. A settlor places all their assets, such as a home, into an investment account, and then once the settlor passes away, the trustee administers the trust to the designated beneficiaries. A settlor’s main job is the establishment of the trust and can be anyone at least 18 years of age.
A settlor appoints a trustee to administer the trust and hold onto the assets for the beneficiary. Their legal duties include managing trust property in a positive manner for beneficiaries’ advantages. A trustee can be any of the following:
The main job of these individuals and entities is to preserve someone else’s assets. This means the trustee cannot combine the trust assets with their own assets. A reliable attorney could provide more information on a trustee’s role, obligations, and legal restrictions.
The primary difference between a settlor and a trustee is that a settlor is a person that creates and funds a trust, while the trustee maintains and holds it.
As for a trustee, most people choose a family member or a professional trustee such as an attorney or trustee company. The downside to choosing a family member in both situations is that they do not have trust administration expertise and may not have a thorough knowledge on these matters. A hardworking lawyer could navigate the legal intricacies involved in the role of a settlor and trustee.
Learn More About the Differences Between a Settlor and a Trustee Today
If you are considering creating a trust, get connected with our professional team of estate planning attorneys. You can schedule an initial consultation with a lawyer to go over all your questions and concerns, and receive sound legal advice. Call our office today to find out more.
Amity Law Group, LLP
