Who Are The People Involved In A Trust?

Who are the people involved in a trust?


Every trust has one or more settlors, trustees, and
beneficiaries. The Settlor is typically the person who
sets up the trust.

The person who sets up a living trust is called the
settlor, grantor, or trustor. If a married couple creates
a trust together, it is a joint trust and both are
considered the settlors of the joint trust. The settlor
creates the trust document that contains all of the
terms, conditions, and directives of the trust.

The trustee is the individual or individuals who
have the power over the trust property. The initial
trustee may be the person or people who established
the trust. If you and your spouse set up the trust
together and elect to stay in charge together, then you
are considered co-trustees. When one spouse dies in
this scenario, the other will become the sole trustee.

The person or people who make the trust work
after you die, or after you and your spouse die if you
are co-trustees, is called the successor trustee. The
primary responsibility of the successor trustee is to
distribute trust property to the beneficiaries who were
named and according to the terms detailed in the trust
document. This individual (or these individuals)
should be someone you feel is trustworthy and capable
of doing this important job.

Beneficiaries are the people or organizations you
choose to inherit your trust property. The beneficiaries
of the trust can be anyone you desire and you can leave
each beneficiary whatever trust property you wish.
Beneficiaries can be income and/or principal
beneficiaries. An income beneficiary will receive
everything that is earned by the principal of the trust,
such as stock dividends, interest earned on bank
accounts, rent from real estate owned by the trust, and
earnings received from a business the trust owns. In
contrast, a principal beneficiary will receive the
principal or assets of the trust at some future date.

In many trust arrangements, the parents are the
settlors, the initial trustees and the first income
beneficiaries. A successor trustee or co-trustees are
designated (often an adult child or children) and the
children are designated as the principal beneficiaries to
receive the trust assets after the parents die. When the
parents pass away, the trust assets are not frozen and
trust assets do not have to go through the court probate
process to be transferred. The trust instrument and
Texas trust law permits the successor trustee to
distribute the trust assets in accordance with the
instructions provided in the trust agreement.

Justin T. Crain is an estate planning attorney in the Plano, Texas office of Thomas Walters Estate Planning where he provides legal services including Wills, Trusts, Gun Trusts, Guardianship Administration, Probate, Estate Administration, Medicaid Planning and Nursing Home Planning to those in the surrounding areas of North Texas.