FAQs About Trusts

Say What? Trust Terminology Defined

by Rania Combs

questionsLawyers use a lot words when talking about trusts, often assuming that everyone knows their meaning. But in speaking to clients and friends, I realized that many people outside the legal community don’t understand what we are talking about. Below are some of the most common terms trust defined:

  1. Trust: A trust is a legal arrangement in which a grantor transfers ownership of his or her assets to trustee, who then manages and controls the assets for the benefit of a third person, called a beneficiary. 
  2. Grantor: The person who creates a trust or contributes property to a trustee of a trust. A grantor is also known as a “settlor” or “trustor”.
  3. Trustee: The person or entity who manages the assets placed in trust and distributes property to a beneficiary according to the terms established by the grantor.
  4. Beneficiary: The person for whose benefit the property is held in trust.
  5. Principal: The assets owned by a trust.
  6. Revocable Trust: A trust that a grantor can amend or revoke during the grantor’s life. A grantor of a revocable trust can also serve as trustee of the trust.
  7. Irrevocable Trust: A trust that cannot be revoked by the grantor.
  8. Intervivos Trust: A trust created by the grantor which takes effect while the grantor is still alive. Intervivos trusts can be revocable or irrevocable.
  9. Pourover Will: A will directing that certain assets be transferred (poured over) into a trust after the death of the person who created the will.
  10. Testator: A testator is a person who makes a will. Sometimes a woman who makes a Will is referred to as a testatrix.
  11. Testamentary Trust: A trust created by a will that takes effect after the death of testator. Probate is necessary to fund a testamentary trust.
  12. Spendthrift Clause: A clause that prohibits a beneficiary from selling, giving away, or otherwise transferring the beneficiary’s interest, and prevents a beneficiary’s creditors from reaching the beneficiary’s interest in the trust. 

This article was originally written on January 18, 2010, and updated on September 25, 2022.

About Rania

Rania graduated magna cum laude from South Texas College of Law Houston and is the founder of Rania Combs Law, PLLC. She has been licensed to practice law since 1994 and enjoys helping clients in Texas and North Carolina create estate plans that give them peace of mind.

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  1. Yee-Ming Chan

    March 10, 2018 at 7:28pm

    My husband and I are planning to update our will, how do we incorporate testamentary trust in the will? Is it just a statement?

    1. Rania Combs

      March 23, 2018 at 9:31am

      You should consult with a lawyer to prepare a Will that includes testamentary trust provisions.