The trustor is an individual or entity that creates a trust by transferring assets into it. The trustor is also commonly referred to as the "grantor," "settlor," or "creator" of the trust.
In the context of estate planning, the trustor establishes the terms of the trust, defining how the assets will be managed, who will be the beneficiaries, and under what conditions the beneficiaries will receive the assets. The trustor has the authority to appoint a trustee, who is responsible for managing the trust according to the trustor’s instructions.
For example, if a parent wants to ensure that their child receives financial support for education after the parent’s death, the parent can act as the trustor by creating a trust specifically for that purpose. The trustor would then outline the rules regarding how funds are distributed to the child, when they can access those funds, and under what circumstances.
In Texas, including Houston, the role of the trustor is crucial in establishing a revocable living trust, a common estate planning tool that allows the trustor to maintain control over the assets during their lifetime while providing for the distribution of those assets after death, often avoiding probate.
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