Trust Dictionary A–Z

The person or organization the trust is intended to benefit.

Mary names her three children — John, Sarah, and Michael — as beneficiaries. They receive the benefit of the trust property according to its terms.

Beneficiaries do not necessarily receive property immediately; the trust controls when and how they benefit.

A short summary that proves a trust exists without revealing your private family terms to a bank or title company.

Mary gives her bank a certification of trust to retitle her account, instead of handing over the full trust agreement.

It lets you do business with financial institutions while keeping your beneficiaries and distribution details private.

Ask your institution whether they accept a certification before sharing your full trust.

Two or more people serving as trustees at the same time.

A married couple may act as co-trustees, or a parent and adult child may serve together.

The trust document needs to explain how co-trustees make decisions and what happens if one can no longer serve.

Decide whether co-trustees must act jointly or whether either may act independently.

A backup beneficiary who receives something only if a primary beneficiary cannot (for example, if they have died before you).

Mary names her children as primary beneficiaries and a charity as contingent beneficiary if none of her children survive her.

Contingent beneficiaries prevent your plan from failing if a primary beneficiary is no longer alive to inherit.

Name a contingent beneficiary for every primary beneficiary and every account where allowed.

A person legally required to act in another's best interest — trustees are fiduciaries.

A trustee must put the beneficiaries' interests ahead of their own and follow the trust's terms and applicable law.

Fiduciary duty is the legal backbone of trust administration — it is why a trustee cannot simply treat trust property as their own.

A trust designed so the creator generally cannot simply change or cancel it whenever they want.

An irrevocable life insurance trust owns a policy so the death benefit is removed from the taxable estate.

Permanence is the trade for benefits like tax savings or creditor separation — but it means giving up easy control.

A trust created while the person is alive — that is all 'living' means here.

Mary signs her trust during her lifetime, so it is a living trust. It takes effect immediately.

Because it exists during your lifetime, a living trust can manage your affairs if you become incapacitated.

A will that 'pours' any assets you forgot to fund into your trust at death.

If Mary opens a new account but never retitles it, her pour-over will directs it into her trust through probate.

It is a safety net — but assets caught by it still pass through probate, which is why funding matters.

The person who created the trust can generally change or cancel it, subject to the trust terms and applicable law.

Five years after creating a revocable trust, Mary changes her daughter's share from 50% to 60% by amendment.

Flexibility — you can adapt your plan as life changes, as long as you retain the required capacity.

The person who creates the trust and puts property into it.

Mary creates the Mary Johnson Revocable Living Trust. Mary is the settlor because she created it and contributes her house and bank account.

The settlor is the person whose intent controls the trust. If you are building your own plan, you are usually the settlor.

The backup manager who can take over when the current trustee can no longer serve.

Mary names her daughter Sarah as successor trustee. If Mary becomes incapacitated or passes away, Sarah steps in to manage the trust.

This is the person who carries out your plan when you no longer can. Choosing a trustworthy, capable successor is one of the most important decisions in the process.

Name a primary successor and at least one alternate in case your first choice cannot serve.

A trust created through instructions that take effect at death, usually through a will.

A will says: 'When I die, hold $100,000 in trust for my grandson until he reaches age 25.'

A testamentary trust only comes into existence after death and may pass through probate — very different from a living trust created today.

The work of managing and distributing trust property according to the trust and the law.

After Mary's death, her successor trustee inventories assets, pays final debts, files taxes, and distributes the remainder to beneficiaries.

Administration is where the plan actually happens. It involves real duties, deadlines, and often professional help.

The written contract that creates the trust and states the settlor's rules for the trustee and beneficiaries.

MyPrivateTrust helps you prepare a draft trust agreement that you review before signing.

This is the core document of your plan. Its terms govern management, distribution, and succession.

A formal change to a revocable trust's terms while it remains revocable.

Mary amends her trust to add a new grandchild as a contingent beneficiary.

Life changes — marriages, births, deaths, moves, new assets — may mean your plan needs to be updated.

The process of properly connecting or transferring particular assets to the trust.

Recording a new deed to transfer Mary's house into the trust, or retitling a bank account in the trust's name.

Creating the trust and funding the trust are NOT the same thing. An unfunded trust generally does not avoid probate for the assets left outside it.

Fund each asset individually — deeds, account registrations, beneficiary designations, business documents, and vehicle titles.

The trust's instruction book — the document that sets all the rules.

The trust agreement states who created the trust, who manages it, who benefits, and what happens at incapacity and death.

Everything the trustee and beneficiaries do flows from this document, so it must be read and understood carefully.

The property that belongs to or is held by the trust.

A house, bank account, investment portfolio, vehicle, business interest, or valuable collectibles can all be trust property.

Creating a trust does NOT automatically put every asset you own into the trust. Funding is the separate step that connects property to the trust.

Build an asset inventory and fund each asset individually (see Asset Funding).

The person responsible for managing trust property according to the trust's instructions.

Mary serves as her own trustee while she is able to manage her affairs, handling the accounts and bills just as she always has.

The trustee is the caretaker of the property. They must follow the trust's terms and applicable law — they cannot simply do whatever they want.