Can the settlor be the sole beneficiary of a trust?

• A. Yes
• B. No
• C. Only if the trust is revocable
• D. Sometimes, depending on circumstances

Answer: (B)

A trust requires a separation between who holds the property (the trustee) and who benefits from it (the beneficiaries). If the settlor is the sole person who benefits, there is no third party to enforce the trustee’s duties, so the arrangement isn’t a true private express trust. In such a setup the property would simply be held for the settlor, which undermines the trust concept and is generally not valid as a private trust (it may be treated as a return of property or as a self-settled arrangement with different rules). Revocability or other circumstances don’t change that fundamental point, though a revocable living trust can name the settlor as a beneficiary during life as long as there are other beneficiaries or a plan for future distribution. So the settlor cannot be the sole beneficiary of a private trust.