Testamentary Trust

A testamentary trust is one that is funded according to the terms of a will when a person dies. Unlike a living trust, a testamentary trust is irrevocable. Because it is not already holding assets when the testator dies, the asset must go through probate before being placed in the trust. The will may specify who will act as trustee and stipulate last wishes regarding how the trust should be administered. However, since the testator is dead, posthumous control over the trustee's actions are limited.

A testamentary trust is often used to will assets such as the proceeds from a life insurance policy to a child. The child will not have access to the funds directly until he/she reaches adulthood. This age is often set for when the child finishes college or reaches the age of 25 - whichever occurs first. Until this point, the trustee makes all decisions about how the assets will be invested and how income from the trust will be disbursed to the child. If a trustee is not designated in the will (or if the chosen trustee decides not to take on the responsibility), the probate court may appoint a trustee of its own choosing.

Fast Facts

  • The trustee of a testamentary trust remains under probate court supervision for the lifetime of the trust.
  • If a testamentary trust is deemed invalid, the funds may become part of the "residuary" estate. This portion of the estate may be left to a specific person named in the will or may be distributed according to "intestate" law.

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  • What is a Testamentary Trust Will?

    A testamentary trust will operates in conjunction with one or more trusts that you create, by generally provid...
    • Site: willsandtrustslawfirms.com
  • Testamentary Trust Will

    Generally, a testamentary trust will is a last will and testament (“will”) which establishes a trust.  A testa...
    • Site: estateplanninglawfirms.com
  • Creating a Trust

    Creating a trust is not as important as creating a will during a person’s lifetime but it can be helpful for a...
    • Site: willsandtrustslawfirms.com
  • Estate Planning Trust

    An estate planning trust or a trust is a financial vehicle created by a grantor for the benefit of the benefic...
    • Site: lawfirms.com
  • Terminate or Change a Trust

    When ownership of certain assets is transferred to a trustee, a trust has been created. The assets, which are ...
    • Site: estateplanninglawfirms.com

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