Setting up a trust is a fairly simple process, but the legal language can be intimidating. Understanding common trust terms can help you feel more confident in your planning. Learn more in this video.
A legal document that spells out how a person’s assets should be managed during their lifetime or after their death.
The person who sets up a trust.
The person or bank in charge of the trust.
The person assigned to manage the trust account.
The person or institution the grantor names to inherit their estate in the trust document.
The person or institution that receives what remains of the grantor’s estate after specific assets have been distributed.
The trust principal is the original amount of the trust, not including any interest, dividends or other income the trust earns over time.
Your trustee has full discretion over when and what funds are given to beneficiaries.
Your trustee must distribute specific amounts of assets to beneficiaries for specific purposes as outlined by the grantor.
A type of trust that can be changed by the grantor at any time.
A type of trust that, once set up and funded, can’t be changed by the grantor without the beneficiary’s permission.