Definition Of Trustor And Trustee In Real Estate
When it comes to real estate, there are many terms and concepts that can be confusing for someone who is not familiar with the industry. Two of these terms are trustor and trustee. While they may sound similar, they refer to very different roles in a real estate transaction.
What Is A Trustor?
A trustor is a person who creates a trust. In the context of real estate, this means that the trustor is the person who owns the property and is transferring ownership to a trustee for the benefit of a beneficiary.
There are many reasons why someone might choose to use a trust to transfer ownership of their property. For example, they may want to avoid probate, protect their assets from creditors, or ensure that their property is distributed according to their wishes after they pass away.
Regardless of the reason for creating a trust, the trustor is the person who initiates the process and decides what assets will be included in the trust.
What Is A Trustee?
A trustee is a person who manages the assets in a trust. In the context of real estate, this means that the trustee is the person who holds legal title to the property on behalf of the beneficiary.
There are many different types of trusts, and the duties of a trustee can vary depending on the specific terms of the trust agreement. However, in general, the trustee is responsible for managing the property, paying any expenses related to the property (such as property taxes and maintenance costs), and distributing any income or proceeds from the property to the beneficiary.
One of the key benefits of using a trust to transfer ownership of real estate is that it allows the trustee to manage the property on behalf of the beneficiary without the need for probate. This can make the process much faster and more efficient, which is especially important if the property is being transferred after the trustor has passed away.
Conclusion
While the terms trustor and trustee may sound similar, they refer to very different roles in a real estate transaction. The trustor is the person who creates the trust and transfers ownership of the property, while the trustee is the person who manages the property on behalf of the beneficiary. By understanding these roles, you can better navigate the world of real estate and make informed decisions about your property ownership.