Now that you know what a trust does, let’s talk for a minute about how a trust works. In a trust, there are three players, there’s the settler, the trustee, and the beneficiary. The settler is the person who sets up the trust, typically the client. The trustee is the person who is entrusted with the management of the assets that are in the trust. The beneficiaries, as the name implies, are the people who are entitled to the benefits of the property that’s in the trust.
ypically most clients during their lifetimes serve in all three of those roles. They set it up and they manage it for their own benefit, but then in the trust they designate a couple of important roles. The first is what we call successor trustees. The second is what we call remaining beneficiaries. Successor trustees who normally think of as the executors of the estate they’re the people who are tasked with stepping up taking control of the trust and everything in it wants the settler their passes away and then managing those assets for the benefit of the beneficiary.
The remainder beneficiaries who normally think of as our heirs. It’s typically the kids, charity, or whatever else the person designations. Those are the people who are entitled to enjoy those things after the settler passes away and is no longer the beneficiary of the trust. The basic idea is typically the person’s going to set up the trust, and then managed and enjoy those assets for themselves during the rest of that person’s lifetime. If we have a married couple usually they’re going to set up a trust where they’re both the settlers and they’re both trustees and after one of them is gone they will serve as the sole trustee. After they’re both gone the successor trustees will step up and then the remainder beneficiaries of the people who will get to enjoy that property whether it’s distributed to them outright, or it’s held in the trust for their benefit until that triggering even we talked about in the earlier video, “What Is A Trust?“. Those are the three jobs that happen in a trust and that’s more or less how a trust works, as the box old stuff people who get to enjoy it and the people who get to enjoy it after this person who set up for the remainder beneficiaries
