This article will focus on some of the key parties to a trust. There are generally three parties to a trust; the grantor, trustee, and beneficiaries.
The Grantor or Settlor is the person that creates the trust. This person will discuss with their attorney their wishes for the trust and the terms that will be drafted into the trust. This is the person that executes the trust.
The Trustee is the person who will receive the property of the trust and accepts the obligation to follow the terms of the trust. The trustee must be prudent with the property in the trust and is obligated to administer the trust for the benefit of the beneficiaries. A trustee can be an individual or corporation.
The Beneficiary or Beneficiaries are the people who will benefit from the trust property. They have a right to enforce the terms of the trust.
In a typical revocable trust meant to avoid probate, the grantor is usually all three parties.
Definition of a Trust
A trust is a legal arrangement designed to manage and distribute assets. According to Cornell Law School, a trust is a division of property rights and a fiduciary relationship where ownership of assets is transferred to a trustee, while the beneficial enjoyment goes to a beneficiary. The person creating the trust is known as the grantor or settlor. A trust is also described as a right, enforceable in equity, to the beneficial enjoyment of property held by another party who holds the legal title.
Trusts allow you to control asset distribution, protect beneficiaries, and maintain privacy throughout the estate planning process. They assist with tax planning, support vulnerable heirs, and reduce the chances of future disputes or mismanagement. A properly drafted trust simplifies estate administration, avoids delays, and strengthens family financial security across generations.
Definition of Trust Roles
Setting up a trust means understanding the significant roles that bring it to life. As outlined by the New York City Bar Association, the key parties to a trust are:
- Grantor (or Settlor): The person who creates and funds the trust.
- Trustee: The individual or institution responsible for managing the trust’s assets in the best interest of the beneficiaries.
- Beneficiary: The person or entity that benefits from the trust.
Selecting reliable individuals or institutions for these roles is essential for the trust to function correctly.
Choosing a trustee is an important decision. Trustees must act carefully, stay loyal to the grantor’s instructions, and protect the beneficiaries’ interests. It is important to appoint someone capable, responsible, and willing to handle fiduciary duties. In some cases, selecting a trust company offers neutrality and consistency.
The grantor defines how and when the assets will be distributed. Beneficiaries have the right to their distributions and can request updates to confirm proper trust management.
Understanding the Difference Between a Living Trust vs Revocable Trust
Living trust and revocable trust are terms often used together, but they are not identical. A living trust is created during the grantor’s lifetime. A revocable trust is a living trust that can be changed or canceled by the grantor at any time.
A revocable trust lets you retain control over your assets during your lifetime while planning for asset distribution after death, often avoiding probate. An irrevocable trust, by contrast, cannot be changed and is often used for tax or creditor protection purposes.
Understanding how revocable and irrevocable trusts work is an important part of knowing the key parties to a trust, since different types of trusts may require different trustee responsibilities and beneficiary considerations.
Revocable living trusts are valuable if you become incapacitated. A trustee can manage your assets without court involvement, avoiding costly and stressful conservatorship proceedings.
Compared to a will, a revocable living trust provides greater privacy, quicker distribution of property, and more control over asset management after death. For Brooklyn residents who prioritize efficiency and discretion, a revocable trust is often a strong choice.
Beneficiary Deeds: How They Work & Maryland Alternatives
While Brooklyn residents use trusts to manage assets, some states like Maryland offer beneficiary deeds. A beneficiary deed, or Transfer-on-Death (TOD) deed, allows real estate to transfer directly to a named beneficiary upon death without probate.
New York law does not allow beneficiary deeds. Instead, similar outcomes are achieved through:
- Revocable living trusts
- Joint ownership with right of survivorship
- Payable-on-death designations on accounts
TOD transfers are simple but lack the flexibility and protections a trust provides. Trusts allow you to decide how and when assets are distributed, offer protection from creditors, and ensure clarity in inheritance planning. For individuals focused on preserving family wealth in New York, a trust is often the more reliable option.
Trusts also provide stronger asset protection. In legal disputes, property held in a well-structured trust is typically more secure from creditor claims than assets passed through a TOD method.
Our Trust and Estate Attorney in NYC Can Help You Set Up and Manage Your Trust
Navigating the key parties to a trust involves important decisions that affect your family and your future. Our firm serves clients across Brooklyn by creating and managing trusts that align with their goals. Whether you’re starting a new plan, updating an existing trust, or selecting a trustee or beneficiary, we provide clear and efficient support.
At Miller & Miller, every trust is tailored to reflect the client’s personal and financial needs, not a standard template. We take time to understand your priorities, ensuring your plan works for today and tomorrow. Contact us today at 718-875-2191.
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