What is the difference between a trustee and a trustor?

The distinction between a trustee and a trustor is fundamental in trust law and estate planning. A trustor, also known as a grantor or settlor, is the person who creates the trust and contributes assets to it. They establish the terms of the trust, specifying how the assets should be managed and distributed.

On the other hand, a trustee is the individual or institution responsible for managing the trust in accordance with the trust terms outlined by the trustor. This involves administering the trust assets, making investment decisions, keeping accurate records, and ensuring that distributions are made to beneficiaries as stipulated in the trust document.

In this context, the correct answer highlights that while the trustor is the one who creates the trust, the trustee plays a critical role in the ongoing management and stewardship of the assets placed into the trust. Understanding this relationship is key for anyone involved with trusts, as it clarifies their roles and responsibilities in the trust arrangement.