A testamentary trust is a trust created by a Will. A testamentary trust is not activated until the person who made the Will dies and the Will has been admitted to probate. A testamentary trust is one way to provide for a surviving spouse and children during their lifetime, while still controlling the ultimate disposition of estate assets after the death of the lifetime beneficiaries. A testamentary trust is often used in the context of minor children who cannot otherwise receive money due to legal disability (being under the age of 18). A testamentary trust is also used in the context of blended families where a surviving spouse is not also the parent of the children of the person making the Will. A revocable living trust could also be used for these same reasons and thus it is important to talk to an estate planning attorney about when to use a revocable living trust or a testamentary trust, or whether both may be required.
Since a testamentary trust is not valid until the person making the Will dies, there is no grant of property to a testamentary trust during lifetime. However, the person making the Will is responsible for selecting a Trustee to manage and administer the trust assets and appointing an Executor in the Will who will then be responsible for delivering estate assets to the trustee of the testamentary trust.
A trustee is responsible for carrying out the terms of the trust. A trustee is considered a fiduciary. A trustee has many fiduciary duties and could be held personally liable for violating his or her fiduciary duties or breaching the trust by not administering the trust in accordance with trust terms. Thus, it is important when making a testamentary trust to consult with an estate planning attorney about the terms of the testamentary trust, who will be the trustee of the testamentary trust, and the duties of the trustee.
An estate planning attorney can also provide counsel and advise about the terms of the testamentary trust and who you should appoint to serve in the role as Executor and Trustee.
The information provided on this page is for educational purposes only and is NOT legal advice. You should consult an estate planning attorney if you have any questions about the information contained on this page or about your particular circumstances or those of someone you know.
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