At its most basic, a trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, also referred to as a Grantor or Maker, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts have evolved to the point where there is a specialized trust to help further almost any estate planning goal; however, all trusts require the same five elements for creation, including:
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- The person who creates the trust. A Settlor may also be referred to as the Grantor, Trustor, or Maker.
- An individual or entity that administers the trust terms as well as manages and invests the trust assets.
- A beneficiary is a person, entity, charity, or even family pet that receives the benefit of the trust assets. A trust may have both current and future beneficiaries.
- The terms are created by the Settlor and may be anything that is not illegal, impossible, or unconscionable.
- A trust must be funded. Almost anything of value can be used to fund a trust, including cash, securities, and real property.
