# Grantor

Canonical URL: https://olomon.com/financial-glossary/grantor
Markdown twin: https://olomon.com/financial-glossary/grantor/llms.txt
Category: Estate & Legacy Planning (https://olomon.com/financial-glossary/categories/estate-legacy-planning)
Also known as: Settlor, Trustor
Last updated: 2026-04-18

## Definition

A grantor (also called a settlor or trustor) is the person who creates a trust by transferring assets into it and defining the rules for how those assets are managed and distributed. In a “grantor trust” for income tax purposes, the grantor is treated as the owner of the trust's assets and reports its income on their personal return.

## Key takeaways

- Grantor, settlor, and trustor are interchangeable names for the trust creator.
- In a grantor trust for tax purposes, the grantor reports all trust income on their personal return.
- Grantor-trust status is a planning feature, not a flaw — it's used in many advanced estate strategies.
- Transferring assets into a trust requires retitling — missing this step is one of the most common estate errors.

## How Olomon thinks about this

_The following section is Olomon's first-party perspective, informed by our work building a financial system of record. It is intentionally separated from the neutral definitional content above._

Olomon makes funding errors visible: every asset on your balance sheet shows the legal owner, so you can immediately see whether the trust you spent money to create actually owns what it should. That single feature catches one of the most common (and expensive) estate-planning failures.

## In-depth definition

Without a grantor, there is no trust. The grantor decides what assets to transfer, who the trustee [will](https://olomon.com/financial-glossary/last-will-and-testament) be, who the beneficiaries are, and what rules govern distributions. Once the trust is funded — meaning assets are actually retitled into the name of the trust — it becomes a separate legal vehicle for those assets.

## Frequently asked questions

### Can the grantor also be the trustee?

Yes — in a typical revocable living trust, the grantor often serves as the initial trustee and names a successor trustee to take over at incapacity or death.

### What is a grantor trust?

A trust whose income is taxed to the grantor under IRC §§ 671–678. Many revocable trusts are grantor trusts during the grantor's lifetime; certain irrevocable trusts are intentionally drafted as grantor trusts for advanced planning purposes.

## Sources

1. [Instructions for Form 1041](https://www.irs.gov/instructions/i1041) — Internal Revenue Service (IRS). Cited for: Grantor trust reporting rules.
2. [Abusive Trust Tax Evasion Schemes — IRS](https://www.irs.gov/businesses/small-businesses-self-employed/abusive-trust-tax-evasion-schemes-questions-and-answers) — Internal Revenue Service (IRS). Cited for: Trust definitions and roles.

## Related terms

- [Living trust / revocable trust](https://olomon.com/financial-glossary/living-trust-revocable-trust)
- [Successor trustee](https://olomon.com/financial-glossary/successor-trustee)
- [Estate plan](https://olomon.com/financial-glossary/estate-plan)

## Cite this page

Olomon Editorial Team. (2026). Grantor. Olomon Financial Glossary. https://olomon.com/financial-glossary/grantor

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