Settlor

The settlor is the person who establishes a trust, sets out its terms, and contributes the first asset (often a nominal sum) to bring it into existence. Once a discretionary or family trust is settled, the settlor usually steps back and plays no ongoing role, to avoid adverse tax consequences. In a testamentary trust the role is effectively filled by the testator, whose Will creates the trust on death.

For a living family trust, the settlor is typically an independent third party (such as the family's accountant) rather than a family member, so beneficiaries are not inadvertently caught by tax or control rules. Example: the family's accountant acts as settlor, contributing $10 to establish the trust, then has no further involvement. The settlor's identity and role are defined in the trust deed.