What Is a Testamentary Trust?

A testamentary trust is a type of trust arrangement that is initiated from the specific requests of an individual's will. When the person dies, the trust is then set up and is funded with the appropriate assets according to the wishes of the deceased person.  This type of trust is very popular and is in contrast to the inter vivos trust.

How it Works

With an inter vivos trust, you set everything up while you are still alive. Then, you fund the trust with the appropriate assets. With the testamentary trust, you leave it up to the executor of your will. You will need to appoint an executor, or the court will appoint one for you. The executor will transfer the assets that are specified into the ownership of the trust. Then the executor will maintain the property in the trust. The executor may be in charge of transferring property from the trust to beneficiaries.

Many people prefer this type of trust arrangement because it allows someone else to handle the details of the estate plan. You can simply specify the terms of the trust, and then your executor will take care of it for you.

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