Legal Definitions - Settlor

Definition: The settlor is the person who creates a trust. This is usually the person who donates or gives away something of value. The settlor transfers legal ownership of this item to the trustee. The settlor also decides how the item will be used for the benefit of the beneficiaries. In some cases, the settlor can also be a beneficiary of the trust. If the settlor creates a self-declared trust, they can also be the trustee.

• John creates a trust and transfers ownership of his house to the trustee. He specifies in the trust document that the house should be used to provide a home for his children after he passes away. John is the settlor in this case.
• Samantha creates a trust and transfers ownership of her stocks to the trustee. She specifies in the trust document that the stocks should be used to provide income for her grandchildren's education. Samantha is the settlor in this case.
• Michael creates a self-declared trust and transfers ownership of his car to himself as the trustee. He specifies in the trust document that the car should be used for his personal use during his lifetime. Michael is the settlor and trustee in this case.

These examples illustrate how the settlor is the person who creates the trust and transfers ownership of something to the trustee. The settlor also decides how the item will be used for the benefit of the beneficiaries. In the first example, John is the settlor and he transfers ownership of his house to the trustee for the benefit of his children. In the second example, Samantha is the settlor and she transfers ownership of her stocks to the trustee for the benefit of her grandchildren's education. In the third example, Michael is the settlor and trustee and he transfers ownership of his car to himself as trustee for his personal use.