Trust parties simplified Grantor Every express trust has one or more grantors who contribute the property to the trustee and state the terms of the trust. The grantor is deemed a substantial contributor/disqualified person with respect to the trust, under IRC 507(d)(2)(A). Other names for the grantor include: creator donor founder settlor Trustor Trustee The trustee or trustees receive the property and hold it for the benefit of one or more beneficiaries. The trustee is the legal owner of the property but must use it for the benefit of the beneficiaries. As a fiduciary, he owes the beneficiaries duties of loyalty and care. The trustee may be an individual or organization. Restatement § 378. Trust companies and banks specialize in acting as trustees in addition to conducting banking and loan business. The grantor and trustee ordinarily may be the same person, and may create the trust by declaring that he holds certain property in trust. Restatement § 349(a). The sole trustee and sole beneficiary may not be identical, because the purpose of a trust is to separate the legal and equitable interests. Restatement § 115. Beneficiary The beneficiary, also known as the cestui que trust, is the beneficial or equitable owner of the property. The beneficiary is said to have the use of the property, and can appeal to the court for an accounting or replacement of the trustee to ensure proper use of the property. See Blacks Law Dictionary (5th Ed. 1979), use. Trusts: Common Law and IRC 501(c)(3) and 4947 By: Ward L. Thomas and Leonard J. Henzke, Jr.
Posted on: Sat, 23 Aug 2014 13:41:23 +0000
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