GRANTOR
What is a Grantor?
Here is the Black's Law Dictionary 1891 version defines it as,
"GRANTOR. The person by whom a grant is made."
Whereas a Grant is defined as
"GRANT. A generic term applicable to all transfers of real property. 3 Washb. Real Prop. 181, 353. A transfer by deed of that which cannot be passed by livery. Williams, Real Prop. 147, 149. An act evidenced by letters patent under the great seal, granting something from the king to a subject. Cruise, Dig. tit. 33, 34. A technical term made use of in deeds of conveyance of lands to import a transfer. 3 Washb. Real Prop. 378–380."
In modern times, according to the Internal Revenue Service, the Grantor is defined as:
Grantor - The grantor is also known as the trustor, settlor, or founder. The grantor is the person who transfers the trust property to the trustee.
In our course, we are operating in the Revocable Living Trust realm.
A revocable trust is "D. Revocable Trust If the grantor retains the ability to revoke the trust and revest the trust assets in the grantor, the trust is revocable and the income is taxable to the grantor under the grantor trust rules. Assets in a revocable trust are included in the grantor's gross estate for federal estate tax purposes. Revocable trusts also called living trusts, are one of the more frequently misunderstood trust concepts. They are used primarily as a will substitute. Assets in trust avoid the cost, time, expense, and publicity of probate. Because a revocable trust may be a will substitute, it may provide for direct gifts to charity as well as establishing a split interest trust, a charitable remainder trust, or a charitable lead trust. For example, a revocable trust may establish a charitable remainder trust upon the grantor's death to benefit a surviving spouse or child. The noncharitable beneficiary can receive an income payment for life, or for a term of years. The remainder will pass to charity at the death of the noncharitable income recipient or the end of the term. Similarly, a grantor may use a will or a revocable trust to establish a charitable lead trust, with an interest for charity during a term of years or for the life of certain individuals, and the remainder to the grantor's spouse, child or other heir.
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The intention is to bypass probate, alongside with not having a tax liability, as a simple trust does not incur one.
"Simple Trust. A simple trust must distribute all its income currently. Generally, it cannot accumulate income, distribute out of corpus, or pay money for charitable purposes. If a trust distributes corpus during a year, as in the year it terminates, the trust becomes a complex trust for that year."
With no income, how can one be taxed for income?
Business expenses all have some tax attached to it in the public realm, with or without your approval.
***Returning to the duties, administrative expectations, and powers of you, the Grantor, of your trust***
For the following section, we will be utilizing this example from the United States in 26 USC Subpart E - Grantors and Others Treated as Substantial Owners subsection 671 to 679.
We will begin on subsection 672 and establish the order of operations.
26 United States Code subsection 672 discusses definitions and rules.
It begins with defining whom the adverse party is and whom the non-adverse party is, whom are the subordinate parties, and the extent of the power the Grantor has.
As the Grantor, you must comprehend the scope of responsibilities that you are taking upon yourself. Let us look at the list of the subordinate and non-adverse parties that the Grantor is responsible for and must have honest and good faith dealings with:
"For purposes of this subpart, the term “related or subordinate party” means any non-adverse party who is—
(1)
the grantor’s spouse if living with the grantor;
(2)
any one of the following: The grantor’s father, mother, issue, brother or sister; an employee of the grantor; a corporation or any employee of a corporation in which the stock holdings of the grantor and the trust are significant from the viewpoint of voting control; a subordinate employee of a corporation in which the grantor is an executive.
For purposes of subsection (f) and sections 674 and 675, a related or subordinate party shall be presumed to be subservient to the grantor in respect of the exercise or nonexercise of the powers conferred on him unless such party is shown not to be subservient by a preponderance of the evidence."
Although you have those listed as "subservient", we must not forget that it is their willing duty to you, as it is your willing duty to them. Do not fail them because they are helping you, as you must not take advantage of them. This is trust, and it is not meant for greedy, malicious, and non-good faith spirited beings.
As Grantor, you have to be able to manage several departments effectively in that manner which provides the proper care, and maintenance of the beneficiaries, and those trustees that are hired, or sourced.
You have administrative powers.
According to subsection 675
The grantor shall be treated as the owner of any portion of a trust in respect of which—
(1) Power to deal for less than adequate and full consideration.
(2) Power to borrow without adequate interest or security.
(3) Borrowing of the trust funds.
(4) General powers of administration.
(4) States that the Grantor, you, have "a power of administration is exercisable in a nonfiduciary capacity by any person without the approval or consent of any person in a fiduciary capacity. For purposes of this paragraph, the term “power of administration” means any one or more of the following powers: (A) a power to vote or direct the voting of stock or other securities of a corporation in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; (B) a power to control the investment of the trust funds either by directing investments or reinvestments, or by vetoing proposed investments or reinvestments, to the extent that the trust funds consist of stocks or securities of corporations in which the holdings of the grantor and the trust are significant from the viewpoint of voting control; or (C) a power to reacquire the trust corpus by substituting other property of an equivalent value."
This last bullet point is very important to keep in mind for a few reasons.
One main reason is that it focuses on the retrieval of the trust corpus by substitution of other property of equal value. What is a trust corpus?
"The term “corpus” is Latin for "body.” A trust corpus is the "body" of the trust. This is the property that is transferred into the trust; also known as the trust res."
By the definition provided to us here, 7 property that is transferred into the trust is and is part of the trust corpus. As Grantor, you have the power to reacquire the trust corpus, and in lieu of that re-acquisition, give something of equal value.
How is this practical in our reality?
See in our reality, they have allocated power, and value onto a piece of paper. Therefore, there is not much to imagine as it is reality. There is a private organization that has created dollars, bonds, and securities, and attached value, and power to these pieces of paper. Some of these papers are valued by raw minerals such as gold, silver, platinum, oil, petrol, and many other forms. Currently there is a transition from physical paper credit and is currently converted into digital format versions of the same paper bond, security, dollar.
Hypothetical situation.
You as the Grantor can create an original intellectual property, similar to that of the intellectual property known as the dollar bill created by another Grantor. If you had your original work and intellectual property valuated with perhaps, a fee schedule, then that would be your valuation of the original property you create. If my fee schedule states that it would as a fine for "Each and every use not authorized by (Grantor) requires a $10,000 USD fine payable to: (Trust) within (number of days) days of notice and the fines must be settled in full.". This is a form of valuation to the trust property.
As grantor, when you create anything, you are creating valuated property that is of the trust corpus.
The trust corpus is outside of the reach of the Grantor. The grantor needs to retrieve the corpus property for a price. That price can be put on paper and it be signed, or placed under seal of the Grantor, and it will have the valuation of how much is written on that document. This document, that the grantor creates, is going to take the place of the trust corpus that is being retrieved, as it will be of equal value to the trust corpus.
The way the dollar has a signature, and valuation, is the same that the Grantor should be able to create in principle.
Please view the example silver backed dollar bill.
What we notice about this paper dollar, is that it is "Equivalent" to a dollar's worth of silver. It states that "IN SILVER PAYABLE TO THE BEARER ON DEMAND". It is a SILVER CERTIFICATE.
According to Black's Law Dictionary 4th Edition Revised, a License is a Certificate.
"LICENSE. Certificate or the document itself which gives permission. Aldrich v. City of Syracuse, 236 N.Y.S. 614, 617, 134 Misc"'
"A "license" is not a contract between the state and the licensee, but is a mere personal permit. Rosenblatt v. California State Board of Pharmacy, 69 Cal.App.2d 69, 158 P.2d 199, 203. Neither is it property or a property right. American States Water Service Co. of California v. Johnson, 31 Cal.App.2d 606, 88 P.2d 770, 774; Garford Trucking v. Hoffman, 114 N.J.L. 522, 177 A. 882, 887; nor does it create a vested right. State ex rel. Biscayne Kennel Club v. Stein, 130 Fla. 517, 178 So. 133, 135; Asbury Hospital v. Cass County, 72 N.D. 359, 7 N.W.2d 438, 452"
This piece of paper has a signature, or a sign of the nature, of the person or being that is authorized to endorse this silver certificate. Secretary of the Treasury.
As Grantor, you will set up these departments, or de-parting of the "ment" or mind. It is an office separated from the mind that is operating autonomously to fulfill s specific function or duty for the benefit of the whole.
You extend the value and credit of the original intellectual property that is also valuated by the fee schedule.
Here is an example of our fee schedule for the trust:
Our example is that when the Grantor needs to reacquire trust property, it can do so and exchange for the trust corpus, a piece of paper (the same as a dollar in principle) that has a valuation of the trust corpus, written on a document, signed, and sealed under the Grantor/ Creator. The piece of paper, (valuated, and signed), will be able to successfully re-lease the trust corpus back to the Grantor, whilst the holding party maintains the "equivalent value" property which is the physical document.
There is much more information that deals with the Grantor and the administrative expectations and powers related to the office.
***End of hypothetical example***
***END OF ARTICLE***
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