Trust and Estate Planning

 

Trust terms you need to know

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.

Definitions

Trust

A legal document that spells out how a person’s assets should be managed during their lifetime or after their death.

Grantor

The person who sets up a trust.

Trustee

The person or bank in charge of the trust.

Trust administrator

The person assigned to manage the trust account.

Beneficiary

The person or institution the grantor names to inherit their estate in the trust document.

Remainder beneficiary

The person or institution that receives what remains of the grantor’s estate after specific assets have been distributed.

Principal

The trust principal is the original amount of the trust, not including any interest, dividends or other income the trust earns over time.

Discretionary distributions

Your trustee has full discretion over when and what funds are given to beneficiaries.

Mandatory distributions

Your trustee must distribute specific amounts of assets to beneficiaries for specific purposes as outlined by the grantor.

Revocable trust

A type of trust that can be changed by the grantor at any time.

Irrevocable trust

A type of trust that, once set up and funded, can’t be changed by the grantor without the beneficiary’s permission.