A trustee is in charge of the trust and manages the trust assets on behalf of the grantor and according to the trust agreement. A trust beneficiary receives the assets of the trust.
A trust is a fiduciary1 relationship in which one party (the Grantor) gives a second party2 (the Trustee) the right to hold title to property or assets for the benefit of a third party (the Beneficiary).
To find out who owns the assets in a revocable trust, look to whoever is the trustee. If the trustee is also the grantor, then the grantor still owns and controls the assets. If the grantor assigned another person or entity as the trustee, the trust owns the assets, which are managed by the trustee.
Accordingly, a trust agreement grants a beneficiary the power to withdraw all taxable income and the power is exercisable solely by that beneficiary, the beneficiary is deemed the owner of the trust income.
A: The grantor (also known as trustor, settlor, or creator) is the creator of the trust relationship and is generally the owner of the assets initially contributed to the trust.
A responsible entity is a peculiarly Australian invention designed to replace the manager/trustee in managed investment schemes. It was created by the Managed Investments Act 1998, which made significant amendments to the prescribed interest provisions contained in the Australian Corporations Act.
Generally speaking, once a trust becomes irrevocable, the trustee is entirely in control of the trust assets and the donor has no further rights to the assets and may not be a beneficiary or serve as a trustee.
The trustee generally has the authority to withdraw money from a trust to cover the cost of third-party professionals, as well as any other expenses arising as a result of administration.
Selecting the wrong trustee is easily the biggest blunder parents can make when setting up a trust fund. As estate planning attorneys, we've seen first-hand how this critical error undermines so many parents' good intentions.
The one establishing a trust is called the trustor or grantor. The one who oversees and manages the trust is called the trustee. In a revocable trust, the trustor may control the trust as well, but in an irrevocable trust, the trustee must be somebody else.
The trustee manages the trust and distributes its assets at a prescribed time. The trustee is in charge of managing the assets in an irrevocable trust while the grantor is still alive.
Once appointed, the Executor “runs” the estate much as a business person runs a business. The Executor makes sure all debts are paid, all taxes paid, all assets cared for, then distributes the remaining assets to the beneficiaries in accordance with law and the Will.
Controlling Persons of a trust, means the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries, and any other natural person(s) exercising ultimate effective control over the trust (including through a chain of control or ownership).
That may not always happen, but that's the way it's supposed to work under California Trust law. The bottom line: Beneficiaries enjoy the Trust assets at some point but, until then, they do not control or manage those assets.
An executor does not possess the power to overrule or change the terms established by a trust; these roles carry separate responsibilities. An executor's role consists of overseeing and closing an estate as per its will's instructions without disrupting or interfering with their independent functions as trustee.
Generally, a trustee cannot alter the fundamental terms of a trust unless the trust document provides a specific mechanism to do so or all beneficiaries consent to the change.
Typically, a revocable trust with clear provisions for outright distribution might conclude within 12 to 18 months. However, in simpler cases, the process can take an average of 4 to 5 months without complications.
Under California law, embezzling trust funds or property valued at $950 or less is a misdemeanor offense and is punishable by up to 6 months in county jail. If a trustee embezzles more than $950 from the trust, they can be charged with felony embezzlement, which carries a sentence of up to 3 years in jail.
While trustees may temporarily be able to delay trust distributions if a valid reason exists for them doing so, they are rarely entitled to hold trust assets indefinitely or refuse beneficiaries the gifts they were left through the trust.
WHO IS THE “RIGHT” TRUSTEE? A natural first inclination is to consider a family member or trusted friend who knows you and your philosophies and values well. Family or friends may personally know your beneficiaries and their needs.
Is a trustee the same as the owner of a trust? The trustee of a trust is not considered the legal owner of the trust's assets in the traditional sense. Instead, the trustee holds legal title to the trust property, but they do so for the benefit of the trust beneficiaries, who hold equitable title.
Trustee. The person who has the legal duty to manage the assets in the trust. The trustee is responsible for safeguarding the trust assets for the grantor or beneficiaries, filing tax returns and more.
Establishing and maintaining a trust can be complex and expensive. Trusts require legal expertise to draft, and ongoing management by a trustee may involve administrative fees. Additionally, some trusts require regular tax filings, adding to the overall cost.
The trustee is the legal owner of the assets held in trust on behalf of the trust and its beneficiaries. The beneficiaries are equitable owners of the trust property.