The settlor (which can be an individual, several individuals or a company) is only involved in the establishment phase of the trust. The settlor invites the trustee to accept the position as trustee.
Once the trustee has accepted the position, the settler gifts an amount of money (the ‘settlement sum’) to the trustee. The settlement sum is a nominal amount, usually $10 or $20.
The settlor, his estate and any corporation or trust in which the settlor or his estate has any interest, may not be a beneficiary of the trust and ideally is not a member of the family for whom the trust is being established. The most suitable settlor is usually a friend of the family.
Additionally, if somebody transfers or sells any asset to the trust for less than its full market value, that person becomes a notional settlor and is also prohibited thereafter from receiving any type of distribution from the trust.