What Is a Settlor?

A settlor is someone who establishes a trust. They're known by several other names: donor, grantor, trustor, and trustmaker. Regardless of what they're called, their role is to legally give control of certain assets to a trustee, who oversees the assets for a beneficiary or beneficiaries. In certain types of trusts, the settlor may also be the beneficiary, the trustee, or both.

Trusts and Settlors

Trusts are designed to hold money, investments, or property for various purposes. Various types of trusts—澳洲幸运5官方开奖结果体彩网:testamentary trusts, living (inter vivo♎s) trusts, 澳洲幸运5官方开奖结果体彩网:revocable trusts, irrevocable trusts, and more—protect assets in different ways. Trusts can facilitate a smooth and speedy transfer of assets upon the settlor's death, eliminate probate costs, minimize 澳洲幸运5官方开奖结果体彩网:estate taxes, and ensure that the settlor’s assets are used in the way they intended. For example, a trust can allow a parent to make sure 💃a child doesn’t squander an inheritance.

Setting up a simple trust can be an inexpensive task that the settlor can accomplish with self-help legal forms. Or it might be a more complicated process with an attorney that costs thousands of dollars. If a bank or trust company is appointed as trustee, there are 🍰also administrative costs to maintain the trust over time.

Example

To see how the settlor’s role works, let’s consider an example of a revocable 澳洲幸运5官方开奖结果体彩网:living trust. The settlor, Lei, establishes the trust. She does this instead of writing a will t🦩o determine what will happen t🎃o her assets after she passes away. That way, when she dies, her assets won’t have to go through probate. And since the process of distributing trust assets doesn’t involve the courts, her assets won’t become a matter of public record.

She places all of her assets—her home, her beach condo, various family heirlooms and several investment accounts—into the trust and retitles these assets in the trust’s name. For the trustee—the person or company that will manage and distribute the trust assets—Lei chooses a trust company. The trust’s 澳洲幸运5官方开奖结果体彩网:beneficiaries upon her death will be her three children, but while she is alive, Lei will be the beneficiary even though she is also the settlor. Because she has chosen a revocable living trust, Lei can make changes𒁃 to it as long as she is alive. For example, if one of her children is convicted of a felony, she can remove that child as a beneficiary.

The Bottom Line

Becoming a settlor—that is, setting up a trust—takes some work, but you'll likely find it to be worth it once the trust is complete and your assets are safe with a trustee. Forming a trust can be complicated, and it's a good idea for it to be done under the guidance of an 澳洲幸运5官方开奖结果体彩网:estate planning attorney. Reach💜 out to a professional in your area if you have any questions.