A land trust is essentially a private agreement, whereby one party, the trustee, agrees to hold title to the property for the benefit of another party or parties, the beneficiary(ies). The creator of the trust is often called the settlor or trustor. This is usually the titleholder to the property before transfer into the trust. The settlor often remains the beneficiary of the trust for his/her lifetime. In essence, the trustee holds the title to the property and must follow the instructions of the beneficiary. The beneficiary typically has the absolute right to direct and control the trustee and receive all income from the trust. The trust agreement, at the creation of the trust, governs the relationship between the trustee and beneficiary. Thus, the trustee often has no more power than the settlor gives him. Plus he or she has no function other than to do as the trust deed instructs.
Land trusts are most often revocable. Therefore, the trustor may changed, modify, or terminate them while he is or she is still alive. The beneficiaries may remove an uncooperative trustee. Since the trustee holds title as a fiduciary, they incur no personal liability for merely being on the title. Nor can the trustee lose the property to his or her personal creditors.