Trustor Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Trustor, written in plain English, along with examples of how it is used.
What is Trustor?
(n) The person who transfer his property to the benefit of a beneficiary under a trust deed or declaration is called Trustor or settler. By the trust deed he disowns his right in the property specified in the trust deed. A trustor can also become a beneficiary under the trust formed by him.
History and Meaning of Trustor
A trustor, also called a settlor, is a person who establishes a trust by transferring property to a trustee, for the benefit of a beneficiary. The trustor creates the trust document, which outlines the rules and instructions that the trustee must follow in managing the trust assets. The trustor may be an individual, a group of individuals, or a legal entity such as a corporation. The trustor must relinquish control over the assets transferred to the trust, which means they can no longer be used for the trustor's personal benefit.
Trusts have been used in legal systems for many centuries. They were originally created as a way to transfer land and other property to the care of someone else, while still maintaining a degree of control over how the property was used. Today, trusts are used for a wide variety of purposes, including estate planning, asset protection, and charitable giving.
Examples of Trustor
John establishes a trust to provide for his children's education. He transfers $100,000 to a trustee, with instructions to use the funds to pay for his children's tuition and related expenses. John is the trustor, his children are the beneficiaries, and the trustee is responsible for managing the trust assets.
Mary creates a trust to protect her assets from creditors. She transfers ownership of her house and other valuable property to the trust, with herself as the primary beneficiary. The trustor, Mary, is able to continue using the property as before, but the assets are shielded from potential lawsuits and other legal claims.
A company establishes a trust to provide retirement benefits to its employees. The trustor is the company itself, and the beneficiaries are the employees who participate in the retirement plan. The trustee is responsible for managing the trust assets and making distributions to employees when they retire.
Legal Terms Similar to Trustor
Trustee: The person or entity appointed to manage the trust assets and follow the instructions provided by the trustor.
Beneficiary: The person or entity that benefits from the trust assets.
Grantor: This term is often used interchangeably with trustor or settlor, and refers to the person who creates the trust.
Irrevocable Trust: A trust that cannot be changed or revoked by the trustor once it has been created.
Revocable Trust: A trust that can be changed or revoked by the trustor at any time.