A settlor, as the name suggests, ‘settles’ the trust.
To become functional a trust must hold trust property. This property is provided by the settlor to the trustee, who holds legal title on behalf of the beneficiaries. In order to create a trust a ‘settled sum’ must pass from the settlor to the trustee. This need only be a nominal amount, such as $10. It is imperative that there is a physical/monitored exchange of this amount.
The settlor cannot be a trustee or beneficiary of the trust. Once the settlor has departed with the initial trust property, he/she need not have any further relationship with the trust.
In most cases, once the trust has created a bank account to hold trust assets, the settled sum will be the amount first deposited into this account.
The settlor executes the trust deed and must sign the deed upon receipt, as well as the trustee/s.
This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.
Updated — Jun 4, 2018