The Many Titles For the Creator of a Trust

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Are you the settlor, trustor, trust-maker, or grantor of your revocable living trust? You're not the first person to ask that question. It can seem confusing at first, but it's really not. All four terms mean the same thing.

As if this were not confusing enough, the trust-maker can also name themselves as trustees and beneficiaries in certain situations. There are many reasons that those who establish trusts do that, but the most common is for health purposes.

Quick Definition of a Trust

A trust is a financial tool designed to ensure that a person's assets are held, managed, and distributed in accordance with their wishes. Trusts can be used for many purposes. Some of the most common are passing on inheritances, college money for descendants, or simply ensuring that beneficiaries use money in the manner the grantor wishes.

Settlor, Grantor, Trust-Maker, and Trustor

The terms grantor, settlor, trust-maker, and trustor all mean the same thing for estate planning purposes. All refer to the person who creates a trust. That individual can be different from other titles seen sprinkled throughout the trust agreement, which is where things can get a bit confusing.

The trustee is the individual charged with managing the trust. Often, the trust-maker of a revocable living trust will appoint themselves as the trustee (the handler of the trust) of their own trust. In that case, all of the terms—"settlor," "trustor," "grantor," and "trustee"—refer to the same person.

That isn't the case with irrevocable trusts, which typically require that the trustor hand over control of the trust to another party appointed to act as the trustee.

Successor-Trustees and Beneficiaries

A "successor-trustee" is someone else entirely—an individual named to take over for the trust-maker of a revocable living trust under designated circumstances if that person has named themselves as the trustee.

The successor-trustee would step into the role of the trustee if the trust-maker were to become mentally incapacitated or pass away. People are generally designated in that fashion when the grantor knows that they will not be able to make decisions in the future, such as when they have a degenerative disorder or a terminal diagnosis. Beneficiaries are the individuals who will inherit or otherwise receive funds from the trust.

Clearing Up the Confusion

The terms for the initiator of a trust are the same regardless of what type you form—revocable, irrevocable, or testamentary. If you created it, you're the grantor/settlor/trust-maker/trustor—and sometimes the trustee. Some prefer to use the term "trust-maker," which is a more modern term, because it clearly describes what the person's title means.

The more modern approach clearly describes the person's role in the transaction. Sometimes even attorneys get confused with legal terms that don't describe a person's role clearly. When in doubt, or when talking to someone who doesn't understand, it might be best to use a term that is the clearest.

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  1. Federal Deposit Insurance Corporation. "Revocable and Irrevocable Trust Accounts."

  2. Federal Deposit Insurance Corporation. "Revocable Trust Accounts (12 C.F.R. § 330.10)."

  3. Federal Deposit Insurance Corporation. "Irrevocable Trust Accounts (12 C.F.R. § 330.13)."

  4. Department of Justice. "Handbook For Chapter 7 Trustees Forms and Instructions."

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