What Is a Settlor in a Trust?
A settlor in a trust is the individual who creates and funds the trust. The settlor decides how the trust will operate, who the beneficiaries are, and who will manage it (the trustee). There are many reasons someone might choose to become a settlor, such as avoiding probate, protecting assets from family disputes, or supporting a nonprofit organization.
In most trusts, the settlor cannot also be a beneficiary, but they can act as the trustee during their lifetime, managing the assets until their death. Once the settlor passes away, the trust enters a new legal and administrative phase.
What Is Trust Administration?
Trust administration begins when the settlor in a trust passes away. At that point, the successor trustee is legally required to take over the management of the trust. One of their first duties is to notify the beneficiaries of the settlor’s death and their rights under the trust.
From there, the trustee must ensure the trust is administered according to the settlor’s instructions. This includes:
- Managing trust assets
- Paying debts and expenses
- Distributing property to beneficiaries
- Filing any required tax documents
Trustees must always act in the best interest of the beneficiaries and follow the trust’s terms exactly. Failing to do so can result in legal consequences and disputes.
Ask an Estate Planning Attorney Today
Need help setting up a trust or navigating trust administration? Consult an experienced estate planning attorney who can guide you through every step.
Visit Hudack Law Estate Planning Attorney to learn more. We proudly serve California, Utah, and Arizona. Call our toll-free number at (877) 314-4309 to schedule a consultation with one of our experienced attorneys.