Grantor (or Settlor)

The Grantor (or Settlor) is an individual who creates a trust by transferring assets into it and establishing the terms under which the trust will operate. This person is fundamental to the trust’s existence and is responsible for outlining the rules and intentions behind the trust arrangement.

In a more detailed context, the Grantor typically provides the initial funding for the trust, which can include various types of assets such as cash, real estate, stocks, or other personal property. The Grantor’s specifications dictate how the assets are to be managed and distributed, including the designation of beneficiaries who will receive the assets upon certain conditions, such as the Grantor’s death, a specific date, or the occurrence of a particular event.

For example, in a revocable living trust, the Grantor retains control over the assets and can modify or revoke the trust during their lifetime. Upon the Grantor’s death, the trust becomes irrevocable, and the assets are distributed to the beneficiaries according to the Grantor’s instructions, bypassing the probate process.

In contrast, in an irrevocable trust, the Grantor relinquishes control over the assets, and the trust’s terms cannot be altered without the consent of the beneficiaries. This is often used for estate and tax planning purposes, as it can help reduce the Grantor’s taxable estate.

In the context of Houston or surrounding areas in Texas, understanding the role of the Grantor is essential for individuals looking to create trusts for estate planning, ensuring that their assets are managed and distributed according to their wishes, while also potentially providing tax advantages and protecting assets from creditors.