Who Are the Key Parties to a Trust?
Learn about the three main parties to a trust — grantor, trustee, and beneficiary — and what roles they play. Get expert guidance from an estate planning attorney.
Who Are the Parties to a Trust?
If you’re considering a trust as part of your estate plan, it’s important to understand the roles of the people (or institutions) involved. Every trust has three main parties, each with specific responsibilities:
1. The Grantor (or Settlor)
The grantor is the person who creates the trust and transfers assets into it. They decide:
- What assets go into the trust
- Who will serve as trustee
- Who the beneficiaries are and how they will receive their inheritance
The grantor sets the rules for how the trust will operate through the trust document.
2. The Trustee
The trustee is responsible for managing the trust assets according to the terms of the trust and for the benefit of the beneficiaries. This includes:
- Safeguarding and investing assets
- Keeping accurate records
- Paying expenses and taxes
- Distributing assets according to the trust instructions
The trustee has a fiduciary duty, meaning they must act in the best interest of the beneficiaries. A trustee can be:
- An individual (like a family member or friend)
- A professional (such as an attorney or accountant)
- A corporate trustee (like a bank or trust company)
3. The Beneficiary (or Beneficiaries)
The beneficiaries are the people or organizations who receive the benefits of the trust. They can receive:
- Income generated by the trust assets
- Specific property or money
- Distributions over time, according to the grantor’s wishes
There can be multiple beneficiaries, and they may receive assets immediately or over an extended period.
Are There Other Parties to a Trust?
Some trusts may also involve:
- Trust Protectors – individuals with authority to oversee or modify certain aspects of the trust if needed
- Successor Trustees – who take over if the original trustee can no longer serve
- Co-Trustees – two or more people managing the trust together
Why Does This Matter?
Understanding the roles of each party is essential when creating or managing a trust. Choosing the right trustee and clearly defining responsibilities helps ensure the trust runs smoothly and your wishes are carried out.
Every trust has at least three main parties: the grantor, the trustee, and the beneficiary. Each plays a vital role in making sure the trust works as intended. If you’re setting up a trust, choosing the right people for these roles is one of the most important decisions you’ll make.
Thinking about creating a trust or serving as a trustee? Our estate planning attorneys can help you understand your options and responsibilities.