Grantor

What it means

The grantor sets the terms, names the trustee and the beneficiaries, and decides what goes in. In a revocable trust the grantor is usually also the first trustee and the first beneficiary.

The word changes by document and by state: settlor, trustor and grantor mean the same person.

In tax law, grantor trust has a further specific meaning — a trust whose income is taxed to the person who created it, which is normally the case for a revocable living trust.

Why it matters

Reading a trust means knowing which role each name is playing, and the same person is frequently in all three.

It also matters after a death: the grantor's death is usually what makes a revocable trust irrevocable and puts the successor trustee in charge.

When you are likely to meet it

• When reading a trust document.
• When a bank asks who created the trust.
• When a trust's tax treatment is being discussed.

Related terms

• Certificate of trustA short document proving a trust exists and what the trustee may do, without revealing its terms.
• Funding a trustActually moving property into a trust — retitling accounts and deeds into its name. An unfunded trust generally does not control assets that were never transferred into it.
• Irrevocable trustA trust that generally cannot be changed or undone once created. Giving up control is the point of it.
• Legal and equitable titleOwnership split in two: one person holds the property, another holds the benefit of it.
• Revocable living trustA trust you create during your lifetime, keep control of, and can change or cancel at any time. Property held in it does not go through probate.
• Successor trusteeThe person who takes over a trust when the original trustee dies, resigns, or can no longer serve.
• Testamentary trustA trust created by a will, coming into existence only when the person dies.
• TrusteeThe person or institution that holds and manages trust property for the people it is meant to benefit.

Sahvelo guidance that uses this

• Wills and trusts