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What is a trust?

By October 15, 2019

Put simply, a trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, also referred to as a Grantor or Maker, who transfers property to a Trustee. The Trustee holds that property for the beneficiaries designated by the Settlor in the trust agreement. The average person enters into trust agreements on a regular basis without even realizing it. For example, imagine that you want to give your niece some family heirlooms you recently came across. Your niece is only 17 though and you feel she should be a bit older before giving her the heirlooms. You, however, must leave the country indefinitely. Therefore, you ask your sister to hold onto the heirlooms until your niece is old enough to give them to her. In that scenario, you have created a trust agreement wherein you are the Settlor, your sister is the Trustee, and your niece is the beneficiary of the trust.