Wills and Trusts:

Creation of a Trust

In order to create a trust, the property owner (sometimes called the "trustor," "grantor," or "settlor") transfers legal ownership to a person or institution (called the "trustee") to manage said property for the benefit of another person (called the "beneficiary").  Say your grandparents moved to Boca and set up a trust for you.  That would make them the "trustors."  The bank was told to pay for your college expenses, tuition, textbooks, notebooks, and so on as needed, making you the "beneficiary."  The bank, functioning as the "trustee" must manage the money and make sure that it is available for your college expenses as defined by your grandparents.  If you try to access that money at the liquor store, the card would be declined, and you'd have some explaining to do after your grandparents are notified about the transaction, and your grandma calls your mother.

Trusts create a "fiduciary" relationship from the trustee to the beneficiary, simply stated: the trustee must act only in the best interests of the beneficiary when dealing with the trust property. If a trustee fails to do so, he is legally accountable to the beneficiary for any damage to his or her interests.

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