Beneficiary - A beneficiary is any individual or individuals designated in the trust instrument as benefiting in some way from the trust (excluding the trustee or any other individual whose benefit consists only of reasonable fees or payments for managing or administering the trust). The beneficiary can be the grantor, another individual or individuals, or a combination of any of these parties.
Grantor - A grantor is any individual who creates a trust. For purposes of this section, the term “grantor” includes:
The individual;
The individual’s spouse;
A person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or individual’s spouse; and
A person, including a court or administrative body, acting at the direction or upon the request of the individual, or the individual’s spouse.
Income - Money or property which the trustee receives from the trust principal, such as, but not limited to, the interest on the trust’s bank account.
Irrevocable Trust - An irrevocable trust is a trust which cannot, in any way, be revoked by the grantor.
Trust - For purposes of this section, a trust is any arrangement in which a grantor transfers property to a trustee or trustees with the intention that it be held, managed, or administered by the trustee(s) for the benefit of the grantor or certain designated individuals (beneficiaries). The trust must be manifested by a valid trust instrument or agreement. A trustee has a fiduciary responsibility to hold or manage the trust’s principal and income for the benefit of the beneficiaries. The term “trust” also includes any legal instrument or device that is similar to a trust.
Trustee - A trustee is any individual, individuals, or entity (such as an insurance company or bank) that manages a trust or similar device and has fiduciary responsibilities.
Payment - For purposes of this section, a payment from a trust is any disbursal from the principal of the trust or from income generated by the trust which benefits the party receiving it. A payment may include actual cash, as well as non-cash or property disbursements, such as the right to use and occupy real property.
Principal - For purposes of this section, real or personal property that is used to fund the trust.
Revocable Trust - A revocable trust is a trust which can be revoked by the grantor. A trust which provides that the trust can only be modified or terminated by a court is considered to be a revocable trust, since the grantor (or his/her representatives) can petition the court to terminate the trust.
NOTE: A trust which is called irrevocable but which terminates if some action is taken by the grantor is considered a revocable trust for purposes of this instruction. For example, a trust may require a trustee to terminate a trust and disburse the funds to the grantor if the grantor leaves a nursing facility and returns home. Such a trust is considered to be revocable.
Updated July 11, 2014