A trust agreement can be extremely complex; however, all trusts require the same five basic elements for creation, including:
- Settlor– the person who creates the trust. A Settlor may also be referred to as the Grantor or Maker of the trust.
- Trustee– an individual or entity that administers the trust terms as well as manages and invests the trust assets. Most Settlors also appoint a successor Trustee in case the original Trustee cannot or will not serve.
- Beneficiary– a beneficiary is the person, entity, or even family pet that receives the benefit of the trust assets. A trust may have both current and future beneficiaries.
- Terms– created by the Settlor and may be anything that is not illegal or unconscionable.
- Funding– almost anything of value can be used to a fund a trust, including cash, securities, and real property.