A trustor is the person who creates a trust. A trustor is also called a grantor, donor or settlor. A trust is a separate legal entity that holds property or assets of some kind for the benefit of a specific person, group of people or organization known as the beneficiary/beneficiaries. When a trust is established, an individual or corporate entity is named to oversee or manage the assets in the trust. This individual or entity is called a trustee. A trustee can be a professional with financial knowledge, a relative or loyal friend or a corporation. More than one trustee can be named by the grantor.

The trustor of a revocable living trust can even decide to manage the trust assets unless and until the trustor becomes incapacitated at which time a person the trustor names in the trust takes over management of the trust assets. Under certain conditions, the income tax becomes payable by the trust or by the beneficiaries of the trust, rather than by the trustor.

The savings occurs when the trust or the beneficiary has a lower tax rate than the trustor.