Trustor Vs Trustee

flik eco finance personal trustor vs trustee

Making decisions about our personal finances can be difficult. Do we invest in stocks or bonds? Should we go with a traditional bank account or try a new online service?

One of the most important decisions we make is whether to become a trustee or trustor. Let's take a look at the differences between these two options and see which one is right for you!

What is a Trustor?

A trustor is an individual who creates a trust, also known as the settlor or grantor. The trustor transfers ownership of their property to a trustee, who manages the property for the benefit of a beneficiary.

The trustor can be the trustee and the beneficiary, but this is not always the case. Trustors often appoint trustees to manage the trust for the benefit of their beneficiaries.

What is a Trustee?

A trustee is a person who holds and manages property or assets for the benefit of another person. A trustee can be appointed by a court, or they can be chosen by the trustor. Trustees have a fiduciary duty to manage the trust property in the best interests of the beneficiary.

What is The Difference Between a Trustor and a Trustee?

A trustor is the person who creates a trust, and the trustee is the person who manages it. The difference between the two is that a trustor has control over the assets in the trust, while a trustee does not. Trustees are fiduciaries, which means they have a legal duty to act in the best interests of the beneficiaries. The beneficiaries are the people who will receive the assets in the trust.

There are many different types of trusts, but they all have one thing in common: they allow the trustor to transfer assets to the beneficiaries without going through probate. Probate is a legal process that can be time-consuming and expensive. Trusts can be used to transfer property, cash, investments, and even businesses.

What Are The Different Types of Trustor?

There are four different types of trustor:

  • Settlor
  • Trustee
  • Beneficiary
  • Protector


The settlor is the person who creates the trust and transfers property into it.


The trustee is the person who manages the trust and is responsible for investing the assets and distributing them to the beneficiaries.


The beneficiaries are the people who receive benefits from the trust.


The protector is the person who has the power to change the terms of the trust or remove the trustee.

What Are The Different Types of Trustee?

There are four different types of trustee:

  • Corporate
  • Individual
  • Special Purpose
  • Government


Corporate trustees are usually banks or other financial institutions. They are responsible for managing the trust fund and investing the money in accordance with the trust agreement.


Individual trustees are typically family members or friends of the trustor. They are responsible for overseeing the trust fund and making sure that it is used in accordance with the trust agreement.

Special Purpose

Special purpose trustees are created to perform a specific task, such as managing real estate or handling tax matters. They are typically organized as non-profit organizations.


Government trustees are government agencies or officials that are responsible for managing public trusts, such as pension funds.

What Are The Advantages of a Trustor?

There are a few advantages of being a trustor. First, you have control over the assets in the trust. This means that you can choose how the assets are used and who gets access to them.

Additionally, trusts can be set up so that they protect your assets from creditors or lawsuits. Finally, trusts can help you minimize your taxes.

What Are The Advantages of a Trustee?

There are a few advantages of having a trustee:

The first advantage is that trustees can help manage your finances if you become incapacitated. This means that someone will be there to pay your bills and make sure your financial affairs are in order, which can give you and your family peace of mind.

Another advantage of having a trustee is that they can help to distribute your assets after you die. This can be a big help if you have a large estate or if you have family members who are not good at managing money.

Trustees can also help to save on taxes. This is because trustees can take advantage of tax breaks and deductions that individual taxpayers may not be able to take.

Finally, trustees can provide professional management of your assets. This can be especially helpful if you have a complex financial situation or if you do not have the time or expertise to manage your finances yourself.

What Are The Disadvantages of Trustor?

There are several disadvantages of being a trustor.

First, if the trustee mismanages the trust fund, the trustor is ultimately responsible for any losses. Second, the trustor gives up a certain degree of control over the assets in the trust.

Third, the trustor may be liable for taxes on the income generated by the trust. Finally, the trustor may be required to provide financial support to the trustee if the trustee is unable to support him or herself.

What Are The Disadvantages of Trustee?

There are a few disadvantages of trustee that are worth mentioning. Firstly, the trustee will have full control over the assets in the trust and how they are used. This means that if the trustee is not responsible with the money, it could be squandered.

Another disadvantage is that trustees can be expensive to set up and maintain. This is because you will need to pay a professional to manage the trust for you, and there may be other associated costs.

Finally, it is worth noting that trustee arrangements can be complex and time-consuming to set up. This is not always an issue, but it is something to bear in mind if you are considering this option.

So, Which One Should You Use?

This is a difficult question to answer, as it really depends on your personal situation. If you're looking for someone to manage your finances for you, then a trustee may be the better option. On the other hand, if you're comfortable managing your own finances and just need someone to act as a holding agent for your assets, then a trustor may be a better fit.

It's really up to you, but hopefully this guide has helped clear up some of the confusion around trustor vs trustee. Whichever route you decide to go down, make sure you do your research and understand all the implications before making any decisions. Good luck!

What Are Some Alternatives to Using a Trustor or a Trustee?

If you're not interested in using a trustor or trustee, there are some other options available to you. You could set up a joint bank account with someone else, which would give both of you access to the funds. This could be a good option if you're looking to manage your finances with someone else but don't want to go through the hassle of setting up a trust.

Another option would be to use a financial planner. A financial planner can help you set up a budget and make investment decisions, which can be helpful if you're not sure where to start with your finances. However, it's important to note that you'll likely have to pay for this service.

Finally, you could simply do everything yourself. This might not be the best option if you're not good with numbers or if you don't have a lot of time to dedicate to your finances, but it is an option. If you go this route, there are a number of resources available to help you, including budgeting apps and online calculators.

What Are Some Tips For Using a Trustor?

There are a few key things to keep in mind when using a trustor:

First, remember that the trustee is the one in control of the assets in the trust. This means that you need to be comfortable with them having this level of control.

Second, it's important to have a clear understanding with the trustee about what the trust is for. This will help to avoid any misunderstandings down the line.

Finally, make sure that you keep good records of all transactions made by the trust. This will come in handy if there are ever any disputes.

What Are Some Tips For Using a Trustee?

There are also a few things to keep in mind when using a trustee:

First and foremost, make sure that you trust the trustee completely. This person will have a lot of control over your finances, so it’s important to be sure that you can trust them implicitly.

It’s also important to communicate with your trustee regularly. Keep them updated on your financial situation and let them know if there are any changes that they need to be aware of.

Finally, make sure to review the terms of your trust regularly. This will ensure that everything is still in order and that the trustee is still meeting your needs.


About Jermaine Hagan (The Plantsman)

Jermaine Hagan, also known as The Plantsman is the Founder of Flik Eco. Jermaine is the perfect hybrid of personal finance expert and nemophilist. On a mission to make personal finance simple and accessible, Jermaine uses his inside knowledge to help the average Joe, Kwame or Sarah to improve their lives. Before founding Flik Eco, Jermaine managed teams across several large financial companies, including Equifax, Admiral Plc, New Wave Capital & HSBC. He has been featured in several large publications including BBC, The Guardian & The Times.

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