Living trust: Encyclopedia II - Living trust - The Parties To The Trust

Living trust - The Parties To The Trust

i. Grantor: the person who sets up the trust; also called the settlor.

ii. Trustee: this is the person who will manage the trust assets. This also may be the settlor in a Revocable Living Trust, since the settlor wants to manage his or her own property.

iii. Successor Trustee: this is the person who will manage the trust assets when the Grantor dies or if she becomes incapacitated. Upon the Grantor’s death, the Successor Trustee will immediately have the same powers that the Grantor had to buy, sell, borrow, or transfer the assets inside the trust. Also, the Successor Trustee has the right to distribute the trust’s assets according to the Grantor’s instructions in the trust instrument. The Successor Trustee does not have the legal right to change the trust. The trust becomes irrevocable upon the Grantor’s death. However, the Successor Trustee has the right to manage the assets in the estate, but must do so for the benefit of the remainder beneficiaries. At then Grantor’s death, the Successor Trustee automatically takes over, without court order and distributes the property to the trust beneficiaries. Where the trust is to end on the Grantor’s death, and the trust is merely a means of avoiding probate, the death beneficiary should ordinarily be named Successor Trustee.

iv. Beneficiaries: the people who will receive the benefit of the trust’s assets are called beneficiaries. The grantor is the original beneficiary. Those who take after are “remainder beneficiaries”.

Adapted from the Wikipedia article "The Parties To The Trust", under the G.N U Free Docmentation License. Please also see http://en.wikipedia.org/wiki