The settlor is the person that establishes a trust by putting assets into it. This process is known as ‘settling’ the assets in the trust.
The settlor also decides who the beneficiaries of the trust will be and can place conditions on how the assets should be managed.
A trustee is a person or company that the settlor appoints to manage the trust and its assets. A settlor can appoint themselves to be a trustee and can also appoint successors to take over as trustee when they die.
Trustees must follow any instructions left by the settlor and can only use the trust assets in the beneficiaries’ best interests. Trustees have more freedom to make decisions in a discretionary trust.
A beneficiary is someone that the settlor chooses to benefit from the trust. They might receive an income from trust assets, inherit trust assets at a certain point in time, or be allowed to live in a trust property.
Settlors can be a trustee and beneficiary of their own trusts, and other beneficiaries can be trustees too.
