In the context of trusts, what is meant by the term "grantor"?

The term "grantor" refers to the individual who establishes a trust. This person is responsible for creating the trust agreement, funding it with assets, and defining the terms under which the trust operates. The grantor sets forth their intentions regarding how the assets should be managed and distributed, and they often have the authority to revoke, amend, or terminate the trust during their lifetime if it is a revocable trust. Understanding the role of the grantor is crucial in the context of trust management, as they are the originator of the trust arrangement and hold significant influence over its structure and purposes.

In contrast, the other roles in the trust arrangement are distinctly different. A trustee is the individual or entity appointed to manage the trust assets according to the grantor's instructions, and beneficiaries are those who will benefit from the trust, receiving distributions of income or principal. The interconnectedness of these roles highlights the grantor's foundational position in the establishment of any trust.