Legal Tip 167: What is a Settlor? The settlor is the person that contributes the initial property to a trust. Usually the settlor is the person setting up the trust for the client – the lawyer, however the settlor could also be an associate of the person behind the trust. I act as settlor for clients setting up a trust under NSW law, but I don’t act as settlor for trusts set up under other jurisdictions because of the adverse stamp duty consequences. Legal Tip 166: Stamp Duty on Trust formations in NSW A settlor can also be a company – though this is not common. Usually the settlor hands over just $10 or $20 to the trustee and then plays no further role. For tax reasons the settlor cannot be a beneficiary of the trust – but there is no legal reason why they could not be a beneficiary. Because of this the settlor should not be a family member but should be an acquaintance who you would not want to benefit from the trust, ever. With testamentary trusts the settlor is actually the deceased person. Does acting as settlor carry any risk? Generally not, but there are some instances where settlors have been required to give evidence about their intentions in setting up the trust, but the courts are generally aware that the settlors roles is often only being a nominee of the trustee or the person behind the trustee and is setting up the trust at their instruction.