What is a Testamentary Trust?
A testamentary trust is a trust contained in a will. A will can contain one or many testamentary trusts each serving its own unique purpose. For example, a testamentary trust can be created to manage the inheritance of a minor child, or manage the inheritance of an individual with disabilities, or even manage the inheritance of a surviving spouse (a so-called marital trust).
A testamentary trust is part of a will. And, the person creating the will appoints a trustee to manage the funds in the trust for the benefit of the beneficiary. A testamentary trust only comes into existence after the death of the will-maker and it lasts as long as its terms provide.
While one of the primary purpose of a living trust is to avoid probate, testamentary trusts, unlike living trusts, which are created during the lifetime of the trust-maker (also known as as the grantor or settlor) do not avoid probate. A will must go through probate before the testamentary trust can come into existence. The executor will probate the will and create the trust in the process. Thereafter, the trustee may need to go to probate court and have the trust examined on a periodic basis.
See also: What is a Trust?