Word Soup – Settlor, Grantor, or Trustor
This is the first in a new series of articles titled “Word Soup”, dedicated to the Hon. Patrick T. Meyers, Judge of the Los Angeles Superior Court. In my opinion a fine judge and also a lexophile – someone with an interest in the meaning and origins of words.
Judge Meyers and his court reporter had the unenviable luck to to draw a libel case a few years ago. The case involved some very horrible social media statements made by old fraternity brothers on a public alumni forum. The challenge involved deciphering at least five different Filipino dialects, and a proposed list of over twenty native speakers as “lay-experts”.
During the case, the good judge emphasized to all the importance of precision in words. It was that precision that in the end decided much of the case in my opinion. I think it’s fitting that a series on word origin and meaning should be named in his honor.
Settlor, Grantor, or Trustor – What’s my line
Clients may often hire lawyers amend trust documents prepared by other attorneys. Last week I was asked the difference between the use of “Settlor” and “Trustor” in the trust.
I explained that these were treated, for most intents and purposes, as the same thing. She asked if there was then a Settlee, Grantee, and Trustee. I replied, “Yes”, but that there are actual subtle differences.
SETTLOR: (n) the grantor or donor in a deed of settlement. 1, a writing. Although the use has fallen away from other areas outside of probate law and trust planning, a settlor could be any person who settles his ownership rights. With regard to trust planning, the creator of the trust is settling the ownership of property placed into the trust.
GRANTOR: (n) the person by whom a grant is made.2 A grant was a transfer of property that could not be transferred by a simple ceremony of handing it to the grantee, the recipient. In modern speech, it refers to the transfer of property that, by law, requires a transfer of title in writing. Real property fits this bill, as do certain financial accounts.
TRUSTOR: (n) a word occasionally though rarely used [then], as a designation of the creator, donor, or founder of a trust.3 The Trustor, a very common word now, refers to the person who creates the trust itself, placing something of value in the hands of the Trustee, the new owner who holds the property for the benefit of a Beneficiary.
Serving Up The Soup
When creating a revocable or irrevocable trust, you actually are a Settlor, Grantor, and Trustor, all in one. You are settling the rules of your ownership rights by granting the ownership of the property and its benefits through the process of creating the trust and entrusting the property to the Trustee. Although we normally use only one name to refer to you in the trust document, all of these actions are taking place.
Dessert
So are there then Settlees, Grantees, and Trustees? Well, yes, in a manner. A settlee is someone for whose benefit a settlement is made. A grantee, on the other hand, is the recipient of the property in the grant, and may not necessarily be for his benefit. And finally, a trustee is the person who holds property for the benefit of another.
Trusts normally only name Beneficiaries, and Trustees. The Beneficiary is named to define what benefits from the trust are given. The Trustee is the other party to the trust who has all of the duties stated. While there may be different roles involved, these are the persons, businesses, or things, who need to be named as they have active parts to play.
References
- 1“Settlor” Black’s Law Dictionary Third Edition. Third Edition 1933. Print
- 2“Grantor” Black’s Law Dictionary Third Edition. Third Edition 1933. Print
- 3“Trustor” Black’s Law Dictionary Third Edition. Third Edition 1933. Print
- Note: Old School Dictionary Used On Purpose
