what is a grantor 
a grantor is an individual or other entity that creates a trust their assets are placed into the trust a grantor may also function as the trustee and may be referred to as the settlor trustmaker or trustor a grantor can also refer to the seller or writer of either call or put options contracts who collects the premiums for which the options are sold they re sold through exchanges to option holders who are responsible for payment of the premiums grantors as trust creatorsthe grantor is the person who creates a trust the beneficiaries are the persons identified in the trust documents to receive the assets it holds the assets in the trust are supplied by the grantor the associated property and funds are transitioned into the ownership of the trust the grantor may function as the trustee managing the property the trust contains but this is not required and it s not possible with some types of trusts the trust is referred to as a grantor trust if the grantor is the trustee non grantor trusts are still funded by the grantor but control of the assets is relinquished this allows the trust to function as a separate tax entity from the grantor trusts are designed to hold money investments or property for various purposes types of trusts include testamentary trusts living inter vivos trusts revocable trusts and irrevocable trusts they re created and protect assets in different ways trusts can facilitate a smooth and speedy transfer of assets upon the grantor s death they can eliminate probate costs minimize estate taxes and ensure that the settlor s assets are used in the way intended a trust can allow a parent to make sure their child doesn t squander away an inheritance trusts also let the settlor decide what should happen to the assets in the event of future mental disability or incapacity provided that they have full mental capabilities at the time they re setting the terms 1grantors as options sellersa grantor is also synonymous with option writer a grantor in this context creates contracts for selling options for an underlying interest or asset a grantor may have sold a call option or assumed a short position in a call option the grantor has to sell the underlying stock at the strike price if the call option is exercised conversely the grantor is said to be long and must purchase the underlying stock at the strike price if they sell a put option serving as an option writer is relatively risky especially in a naked position when the writer doesn t have possession of the asset involved in the contract options are contracts that provide the buyer and seller with the right but not the obligation to purchase or sell a particular asset at a specified price on a particular date this is referred to as the strike price these contracts are supported by the presence of the underlying asset which may be composed of a particular stock an exchange traded fund etf or other applicable financial products 2the options writer or grantor has no authority as to whether the option will be exercised before the contract expires in cases where a grantor anticipates a loss based on the position they can choose to participate in a secondary deal with another party designed to offset the risk associated with the obligation 