Glossary: Settlor (Grantor)

A settlor (also known as a grantor) is the individual who creates and funds a trust by transferring assets into it.

They establish the terms of the trust and define how the assets should be managed and distributed.

What a settlor (grantor) does

A settlor is the originator of a trust structure.

They:

• create the trust agreement
• transfer assets into the trust
• define how the trust operates
• set rules for distribution to beneficiaries

Their decisions shape how the trust functions over time.

Why a settlor (grantor) is important

The settlor determines the purpose and structure of the trust.

Without a clearly defined settlor:

• the trust cannot be properly established
• terms and intentions may be unclear

With a settlor:

• the trust has defined rules and purpose
• asset management and distribution are structured
• long-term planning can be implemented

What a settlor (grantor) controls

A settlor typically controls:

• the initial setup of the trust
• the assets placed into the trust
• the instructions governing the trust

Depending on the type of trust, the settlor may or may not retain ongoing control.

What a settlor (grantor) does NOT do

A settlor does not:

• manage the trust on a day-to-day basis (this is the role of a trustee)
• act as the beneficiary (unless specified in some trust types)
• retain control in all cases (especially in irrevocable trusts)

Their role is primarily in creation and setup.

When a settlor is involved

A settlor is involved:

• when creating a trust
• when transferring assets into it
• when defining long-term estate planning structures

Their role is most active at the beginning of the trust’s lifecycle.

Common misunderstandings

Some common misconceptions include:

• confusing the settlor with the trustee
• assuming the settlor always retains control
• not understanding differences between revocable and irrevocable trusts

Clarity of roles is essential.

Related concepts

• Trust
• Trustee
• Beneficiary
• Irrevocable Trust

Practical note

The choices made by the settlor at the time of creation have long-term implications for how the trust operates and how assets are distributed.