The Grantor's Role in a Revocable Living Trust
In a typical revocable living trust, the grantor wears three hats:
- Grantor: The person who created the trust and moved assets into it.
- Trustee: The person who manages the trust assets day to day. The grantor keeps full control.
- Beneficiary: The person who benefits from the trust during their lifetime. The grantor continues to use all trust assets.
When the grantor dies or becomes incapacitated, the successor trustee takes over. They manage and then distribute the assets to the named beneficiaries.
Grantor Trust for Tax Purposes
The grantor keeps control of a revocable living trust. So the IRS treats it as a "grantor trust" for income tax purposes. The grantor reports all trust income on their personal tax return. They use their Social Security number. No separate tax return is needed during the grantor's lifetime.
Settlor vs. Grantor: Full Comparison
For a detailed breakdown of how these terms differ, see our complete guide: Settlor vs. Grantor: What Is the Difference?