A trustee agreement, more formally known as a Trust Agreement or a Deed of Trust, is a legal document that creates a fiduciary relationship known as a trust. This agreement allows a person (the Grantor) to place assets under the control of a trusted individual or institution (the Trustee), who is legally obligated to manage those assets for the benefit of a third party (the Beneficiary).

Think of a trust as a secure financial vehicle. The Grantor is the one who designs and builds this vehicle, placing valuable assets inside. The Trustee is the designated driver, who doesn’t own the vehicle but has a strict set of instructions (the trust agreement) on where to go and how to manage the contents. The Beneficiary is the passenger who enjoys the benefits of the journey as dictated by the Grantor’s original plan. This powerful legal structure is a cornerstone of modern estate planning, asset protection, and wealth management.

To understand a trust, you must first understand the three essential roles that are defined within the agreement. A trust cannot exist without all three.

  1. The Grantor (also known as the Settlor or Trustor): This is the creator of the trust. The grantor is the individual who owns the assets and makes the decision to transfer them into the trust. They are the architect of the agreement, setting all the rules, defining the objectives, and naming the other parties involved.
  2. The Trustee: This is the individual or entity (such as a bank’s trust department or a law firm) given the legal title and control over the assets in the trust. The trustee has a fiduciary duty—the highest standard of care in law—to manage the trust’s assets prudently and solely in the best interests of the beneficiary. They must follow the instructions in the trust agreement to the letter.
  3. The Beneficiary: This is the person, group of people, or even an organization (like a charity) for whom the trust was created. The beneficiary is the party who will receive the benefits from the trust’s assets, whether in the form of regular income payments, access to the principal at a certain age, or other distributions as specified by the grantor.