Posted in Finance, Accounting and Economics Terms, Total Reads: 606
The person who creates a trust. A trustor is a donor or grantor of funds or means for beneficiaries. A trustor is also called as a settlor.
A trustor transfers the funds to a third party called trustee who maintains the assets for the assistance to beneficiaries. A trust is an individual legal entity that holds the assets or funds for the benefit of specific people, group of people or an organization known as beneficiaries.
A trustee looks over the trust who can be a professional in particular field or a loyal friend/relative. In some circumstances, the trust or the beneficiaries are liable to pay taxes rather than the trustor.
So, the trustor can save on taxes when the tax rate applicable to the trust is lower than that for the trustor.