The simplest description of a trust is a description of its parts.
A trust itself can be formal almost like a separate legal entity like a corporation, it can have its own tax ID number and its own name.
However, the creation of a trust can simply be an act such as giving a parent money for a child’s education.
The settlor is the one who contributes money, property or something else of value to the trust. The beneficiary is the one who receives money, property or benefits from the trust or in some manner benefits by the trust holding or growing assets. The trustee is in charge of the trust and acts as the manager, steward or owner of the trust assets.
However, the trustee is bound to manage the assets of a trust in the way the settlor set forth in the trust documents and instructions. In Jimenez v. Lee 274 Ore. 457 (1976) it was held that a grandmother created a trust when she purchased a $1,000 savings bond in joint name of the father Lee, and/or the child Jimenez specifically for the child’s educational needs. Even though there was evidence that that the father had used the funds for the child’s benefit, the court determined that the father was liable for all non educational expenditures.
Thomas Jefferson on Wills
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