SETTLOR Meaning and
Definition
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A settlor, also known as a grantor or trustor, is an individual or entity that establishes a trust by transferring assets or property into it. The settlor is responsible for creating the legal framework of the trust, outlining its purpose, terms, and provisions. This individual, through the act of settling (transferring) assets, relinquishes ownership and control of the property over to the trust.
The settlor's role is vital in the establishment of a trust, as they are the individual who decides to create the trust and the one who contributes assets to it. They have the power to determine how the assets are managed, distributed, and utilized by the trust, usually through the creation of a trust agreement or deed. The settlor can establish various types of trusts, such as revocable or irrevocable trusts, based on their specific legal and financial objectives.
While the settlor transfers assets into the trust, they may retain certain rights or benefits, depending on the type of trust established. For example, in a revocable trust, the settlor can usually amend or revoke the trust at any time, whereas an irrevocable trust generally cannot be altered without the consent of the beneficiaries.
Overall, the settlor plays a fundamental role in the creation and funding of a trust, shaping its structure, terms, and purposes to achieve their intentions and estate planning objectives.
Etymology of SETTLOR
The word "settlor" is derived from the verb "to settle" and the suffix "-or", which indicates a person who performs a specific action. "Settle" in this context refers to the act of creating a trust, in which an individual transfers assets or property to a trustee for the benefit of another person or organization. Over time, the term "settlor" emerged to describe the person who initiates and establishes the trust by settling property into it.
Similar spelling word for SETTLOR
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