How Does a Trust Work… Simply?

At McCartha Law, we believe that understanding how a trust works doesn’t have to be complicated. While trusts can feel overwhelming at first, the core concept is relatively straightforward.

In simple terms, a trust is an agreement that outlines how your assets (property, money, or other valuables) will be managed and distributed. There are three essential roles involved in every trust: the Grantor, the Trustee, and the Beneficiary.

1. The Grantor: The Creator of the Trust

The Grantor (sometimes called the “Settlor” or “Trustmaker”) is the person who establishes the trust. This is the individual who decides how their assets should be handled and creates the rules for the trust (what we call the “rules of the game”). The Grantor also decides which property will be transferred into the trust.

2. The Trustee: The Legal Owner

The Trustee is the person or institution responsible for managing the trust according to the Grantor’s instructions. The Trustee holds legal ownership of the trust property. This means they have control over the property and are tasked with making sure the trust operates smoothly.

Importantly, the Trustee does not own the property in the usual sense—they must act in the best interest of the Beneficiary and follow the Grantor’s rules. The Trustee holds what we call “legal ownership,” but only in a fiduciary sense, meaning they must act responsibly and in good faith.

3. The Beneficiary: The Ultimate Recipient

The Beneficiary is the person or entity who ultimately benefits from the trust. The Beneficiary has what we call equitable ownership, meaning they are entitled to the benefits of the trust property. The Beneficiary may receive income from the trust, use of the property, or an outright distribution of assets at a certain time.

In essence, the Beneficiary holds the other half of ownership, where they gain the benefit, but do not have control over the assets.

The Three Key Essentials of Every Trust

Every trust, no matter how complex or simple, has these three key components:

Grantor (Creator): The one who creates the trust and decides its purpose.
Trustee: The person or institution who manages and controls the assets.
Beneficiary: The person or entity who ultimately benefits from the trust.

These three roles work together to ensure that the Grantor’s wishes are carried out, the Trustee manages the property responsibly, and the Beneficiary receives the intended benefits.

How Trusts Benefit You

Trusts are often seen as a way to protect assets, minimize taxes, and provide for loved ones in a structured manner. Whether you’re planning for retirement, protecting assets for your children, or ensuring your family avoids probate, a trust can be an incredibly valuable tool.

At McCartha Law, we understand that creating a trust can be an emotional and complex decision. It’s not just about choosing who gets what—it’s about making sure everything happens exactly the way you want. That’s why we’re here to help you navigate the process with confidence.

Don’t Go It Alone—McCartha Law Is Here to Help

Creating and managing a trust might seem straightforward in theory, but in practice, it’s essential to get it right. That’s why it’s important to have legal guidance from professionals who specialize in trust law.

At McCartha Law, we can help you create a trust that reflects your goals, provides security for your loved ones, and ensures everything works as intended. We’ll be with you every step of the way—not just online, but in person, ensuring you make informed decisions and avoid common pitfalls.

Ready to Get Started?

If you’re ready to learn more or create a trust that meets your needs, contact McCartha Law today. We’re here to provide expert advice and support, helping you protect your assets and secure the future of those you care about.

In Alabama probate, an executor (personal representative) does not need to file a formal claim for administrative expenses like other creditors must do. However, there are important rules regarding timing, reasonableness, documentation, and approval of those expenses.

Key Points About Executor Administrative Expenses in Alabama:

Priority of Payment

Under Ala. Code § 43-2-371, administrative expenses (including executor’s fees and expenses incurred in managing or preserving the estate) are given top priority in the order of estate payments — even before creditor claims and distributions to beneficiaries.

No Need to File a Creditor Claim

Executors do not need to file a claim under Ala. Code § 43-2-350 et seq. like outside creditors. Instead, they are entitled to direct reimbursement from the estate for reasonable and necessary expenses incurred in administering the estate.

Timing and Reimbursement

Executors can reimburse themselves from estate funds as expenses are incurred, so long as:

The estate has sufficient liquidity.
The expenses are reasonable, necessary, and documented.
The executor keeps clear records and receipts.
The probate court has not otherwise restricted disbursements.

In practice, many executors will wait until an interim or final accounting is approved by the court or agreed to by the beneficiaries, especially for larger reimbursements, to avoid disputes.

Court or Beneficiary Oversight

If the executor is reimbursing themselves:

It’s best practice to either get court approval (especially in supervised administration) or
Have beneficiary consent, especially if distributions or funds are contested.

The final settlement or accounting is where the executor must justify all administrative expenses and fees. If a beneficiary or even the court objects, the probate judge may review for abuse or excessiveness.

Need Help Navigating Executor Duties or Probate in Alabama?
At McCartha Law, we guide executors and families through the probate process with clarity and confidence. If you have questions about executor expenses, reimbursements, or how to avoid disputes with beneficiaries, we’re here to help.

Call us today at (256)270-4233 or schedule a consultation online to make sure your responsibilities are handled correctly—and your rights as an executor are protected.