Whether one is speaking of real estate transactions or estate planning, a grantor is the person who is deeming property to the other, the grantee. A trust or other document may use different language, such as “the party of the first part” and “the party of the second part,” but in such cases the former is still the grantor and the latter the grantee. If you are considering setting up a trust to benefit your loved ones after you pass, it is a good idea to speak with a College Station real estate attorney who has the experience and knowledge to help you find the perfect type suited to your needs.
Grantor/Grantee in Real Estate
In real estate transactions, a grantor is always the party who holds ownership, whether fully or partially, that is being passed to the grantee. Thus, the grantee is generally the purchaser. The grantee may enjoy the full benefits of ownership thereafter, or limited rights, such as use of water rights. When the trustor is including real estate in a trust, he is the grantor as well, while the beneficiaries, or heirs, are the grantees.
Grantor/Grantee in Estate Planning
For the purposes of estate planning, then, the grantor is the person who is planning how to provide for his heirs upon his demise. In other words, he is the grantor, and the heirs the grantees. When a trust is set up, then, the grantor works with his attorney to determine the type of trust that will best help heirs to avoid taxes and probate, as well as ensure that the assets held in trust are passed on as wished. The trustee holds the assets in trust, and on the death of the grantor, a successor trustee may be named, who then distributes assets from the grantor to the grantees.
It is important to keep in mind that, without formal estate planning, you run the risk of having your assets held for a long period in probate court after your death, and they may not be distributed as you would wish. It is essential, therefore, to work with an attorney to set up a plan using effective tools, such as trusts.
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