Testamentary trust definition
/What is a Testamentary Trust?
A testamentary trust is a trust contained in a last will and testament that is triggered by the death of a settlor. The trustee named in this trust agreement is responsible for managing the assets placed in the trust by the settlor. This approach is useful for triggering immediate professional management of the decedent’s assets, while also avoiding probate court. It is an especially useful tool when the intended beneficiaries are either too young, disabled, or infirm to manage the estate by themselves.
A further benefit of a testamentary trust is that assets are only placed in the trust after the settlor’s death. This means that the settlor has full use of these assets during his or her lifetime, while still being assured that the assets will be used thereafter as he or she intended.
A testamentary trust is usually terminated as of a specific date or event, such as the beneficiary reaching a sufficiently advanced age to administer the estate’s assets in a responsible manner.