A. A living trust is a legal document that provides instructions for what you want to happen to your assets when you die. It can avoid probate, unlike a will, and it prevents the court from controlling your assets if you become incapacitated. There are three parties to a property executed trust –
Grantor – Also called Settlor or Trustor, this is the person who creates the trust, and usually the only person who provides funding for the trust. More than one person can be a grantor of a trust, such as when a husband and wife join together.
Trustee – This is the person who holds title to the trust property and manages it according to the terms of the trust. Generally, the grantor also serves as the trustee during his or her lifetime.
Beneficiary – This is the person designated by the grantor to receive the income or principal from the trust.
In order to be operable, the trust must contain assets or property. In other words, the trust must be funded. The funding process involves transferring assets from the grantor to the trustee. The trustee then holds the assets, manages them, and eventually distributes them according to the trust provisions.