settlor
Settlor is the person who sets up a trust and puts money or property into it for someone else's benefit.
In plain English
There is that uncle in every family who, before travelling out, calls a small meeting. He hands his brother a folder with the title documents to the compound in Owerri and says, this land is for the children, hold it for them until they are grown. He is not giving it to his brother. He is trusting his brother to manage it for the real owners. That uncle, in the language of law, is a settlor.
A settlor is simply the person who creates a trust and puts something valuable into it, money, property, shares, land, so that someone else, called a trustee, can manage it for the benefit of a third person, called the beneficiary. The settlor draws the map and then steps back, trusting that the trustee will follow it.
Say a Nigerian mother in London wants to make sure her teenage nephew back in Enugu inherits her savings account only when he turns twenty five, not before. She sets up a trust with a solicitor, names her sister as trustee, and puts £20,000 into it. The mother is the settlor. Her sister manages the money. Her nephew benefits later.
This matters because many families in Lagos and in the diaspora lose property or money to confusion after someone dies, simply because there was no settlor who arranged things clearly while alive. A trust set up properly can protect school fees, a widow's upkeep, or a family house from being swallowed by squabbles.
The settlor's job is really an act of foresight. You are saying, I may not always be here to manage this myself, so let me arrange it now, on my own terms, while my mind is clear and my intentions are mine alone.
A businessman in Abuja sets up a trust and transfers ₦15,000,000 into it, naming his lawyer as trustee and his two daughters as beneficiaries, to be paid out for their university fees. He is the settlor of that trust.
Questions people ask
Can a settlor also be the trustee or beneficiary of the same trust?
Yes, in some arrangements, though it depends on the type of trust and local law. A person can settle property into a trust and still manage it themselves as trustee, or even benefit from it in certain revocable trusts, but this needs careful legal drafting to avoid disputes later.
What happens if the settlor dies?
The trust usually continues as planned, because the whole point of setting it up was to make sure things run smoothly whether the settlor is present or not. The trustee simply continues managing the assets according to the settlor's original instructions.
Do I need a lawyer to become a settlor?
Yes, it is strongly advisable. Trusts involve legal documents, tax implications, and clear wording, so working with a solicitor ensures the trust actually holds up and does what you intended, rather than causing family confusion later.
Last reviewed