Testamentary Trusts: The Basics

Unlike a living trust, a testamentary trust is provided for in a last will and testament, however its terms are established by an individual during their lifetime. The trust sets up the distribution of all or part of an estate and sometimes the proceeds from a life insurance policy held on the life of the person creating the trust.

While a testamentary trust can be provided for in a last will and testament, you can also direct that your living trust create one. Typically, a testamentary trust is created for children who are minors, loved ones with disabilities, or anyone who would receive a large sum of money outright.

Because testamentary trusts take legal effect after you die, they are considered irrevocable and cannot be changed. Testamentary trusts come into play at the end of the probate process after the person who created it has died.

The trustee who the settlor appoints will manage the funds in the trust until the beneficiary of the trust is in control.

If you are the trustee of a testamentary trust or you wish to create a testamentary trust as part of your last will and testament, contact Bach & Jacobs, P.A. to consult with one of our attorneys.