Hi Lee Phillips again. Yeah it’s me. I’ve had the question what’s the difference between a grantor of a trust and the trustee of the trust? Well you’ve got to have some terminology here. the grantor is the guy who sets up the trust and the lawyer will call him the grantor, the settlor, or the trustor it’s the guy that sets up the trust and originally puts money or property into the trust. So the grantor is the guy who sets it up the trustee is the guy that manages it on behalf of a third party, the beneficiary. So the grantor sets it up the trustee manages it in the
trust for the benefit of the beneficiaries. Now here’s the hard part to understand, maybe and that is you can wear the grantor’s hat you can also wear the trustees hat and you also get to be the beneficiary in your living revocable trust and the definition of a grantor trust in the IRS and it’s a special IRS terminology the definition basically says that you’re
all three of these guys and if you’re all three of these guys, the grantor/the settlor/the trustor, the trustee trustor no, trustee and the beneficiary then the IRS says we don’t want to know about it it’s a grantor trust is the way they term it. So the grantor sets up the trust the trustee runs the trust they can be different people, they often are or they in living revocable trusts are almost always the same person. When you do your living revocable trust for your estate planning it’s gonna be the same person you, grantor and you, trustee and even you, as beneficiary. So the difference between grantor and trustee is the same if you’re the same guy. If they’re different they’re very different people and I can get a hired gun somebody to manage my trust for me. Banks love to do that. In the old days it always used to be the First Cheatem and Howe Bank and Trust and in the 80s they decided that the “Trust” was a little too stuffy the “Bank and Trust” and they wanted to appeal to the common person and trusts were for rich people so they dropped the name trust from the banks but it always used to be The First Cheathem and Howe Bank and Trust and now we don’t talk about banks being trusts but they love to be trustees because they charge you a little money. So trustee, grantor two different animals to different hats at least but you can be both or we can have different people be both. They’d be one or the other I guess, not both. All right? Lee Phillips. Now don’t forget to subscribe because we keep putting out new stuff and follow the links down below so that you can get more information on a lot of topics from LegaLees and Lee Phillips