There is so much talk about how great trusts are but they can be confusing. For example, who all is involved with the trust? Well there are several different parties involved in a trust: the grantor, trustee, beneficiaries, and final beneficiaries.
The grantor is the person who creates the trust. There can be two grantors, for example, if a married couple decides to create a joint trust. The grantor decides what type of trust will be created and who all of the other parties to the trust will be. The grantor also retains the right to change who the parties are any time after the trust has been created.
The trustee is the person who manages the trust. In some types of trusts, the grantor can also be the trustee. There can be multiple trustees for example if a married couple is the trustees or if siblings are the trustees or even if friends of the grantor are trustees. The trustee decides whether or not to take money out of trust and if so how much. The trustee decides whether or not to invest some of the money that is in the trust.
The beneficiaries are those who will benefit financially from the trust. There are two types: principal and income beneficiaries. Principal beneficiaries are those who may be given the principal money from the trust. Principal money is the money that was put into the trust by the grantor. Income beneficiaries are those who may be given any income that the trust makes. For example, if some of the money in the trust is invested and it turns a profit, the income beneficiaries are allowed to be given any or all of this profit.
The final beneficiaries are those who will benefit financially from the trust once the grantor passes. When the grantor created the trust, the grantor chose who the final beneficiaries were to be and how much each would receive.