Definition

Noun: A testamentary trust is a legal and financial arrangement that is established by the provisions of a person's will. It only comes into existence and becomes active after the person who created the will (the grantor or testator) has died. Its purpose is to manage and distribute the deceased person's assets according to the specific instructions laid out in their will.

Usage

A testamentary trust is a common estate planning tool. It is not a separate entity while the grantor is alive; it is simply a set of instructions within the will. The probate court typically oversees its creation after death.

Examples

• The wealthy philanthropist's will included a testamentary trust to provide for his grandchildren's education.
• The attorney explained that a testamentary trust would allow her client to control how her assets are used for her children's benefit long after her death.
• The court appointed a trustee to manage the testamentary trust according to the terms of the deceased's will.

Advanced Usage

• Contrast with Living Trust: A testamentary trust is distinct from a (or ), which is created and can become active during the grantor's lifetime. The key difference is the time of activation.
• Probate Requirement: Because it is part of a will, a testamentary trust must generally go through the probate process, which is the court-supervised administration of the will.

Variants and Related Words

• Trust (n.): The broader legal concept of a fiduciary relationship where one party (the trustee) holds property for the benefit of another (the beneficiary).
• Will (n.): Also called a , the legal document that contains the instructions for creating the testamentary trust.
• Testator/Testatrix (n.): The person who makes and leaves a valid will (male/female).
• Grantor (n.): The person who establishes a trust; synonymous with or .
• Trustee (n.): The individual or institution appointed to manage the trust assets.
• Beneficiary (n.): The person or entity designated to receive benefits from the trust.

Synonyms

• Trust under will: A direct synonym emphasizing its origin.
• Post-mortem trust: A less common synonym highlighting that it takes effect after death.

Related Phrases

• To create a testamentary trust: The act of including the trust provisions in one's will.
• To fund a testamentary trust: The process of transferring assets from the estate into the trust after the grantor's death.
• Terms of the testamentary trust: The specific rules, conditions, and instructions governing the trust's operation.

Noun

1. a trust that is created under a will and that becomes active after the grantor dies