Settlor

A settlor is the individual or entity who establishes a trust. They transfer assets to a trustee to be managed for the benefit of beneficiaries, as specified within the trust agreement. The settlor dictates the terms of the trust, including how assets are distributed, the duration of the trust, and the roles of the trustee and beneficiaries. Essentially, the settlor creates the legal framework that governs the trust.

Settlor meaning with examples

• John, the settlor, wanted to ensure his grandchildren would receive financial support for their education. He established an educational trust, naming his brother as trustee and outlining specific guidelines for the funds' use. This ensured the funds were protected and used responsibly.
• Sarah, the settlor, created a revocable living trust to manage her assets during her lifetime. This enabled her to retain control while planning for her eventual incapacity or death. She was able to modify the terms of the trust to adapt to changing circumstances.
• A wealthy family, acting as the settlors, formed a charitable trust to fund scientific research. The trust's assets were professionally managed to generate income for the research. Their intent was to contribute to the progress of medical science and to leave a positive legacy.
• In estate planning, the settlor is a central figure as their directives are implemented. The settlor's wishes, detailed within the trust document, determine how assets are handled and distributed. This includes specifics like the type of assets and how often distributions will take place.