What is a testamentary trust?
A testamentary trust is a type of trust created under the terms of a last will and testament. In the state of Pennsylvania, if an individual’s estate exceeds certain limits set forth by the state, a testamentary trust may be established. These trusts are designed to provide for the care and support of individuals with disabilities who cannot support themselves adequately. They provide a way for an individual to provide for a person with a disability, while at the same time protecting them from potential financial abuse. The most common type of Testamentary trust is a Special Needs Trust. This type of trust can be used to provide support for an individual with special needs by supplementing their government assistance. For example, funds in the trust can be used to purchase items not covered by government programs, such as medical or therapeutic equipment, or to pay for travel or recreational activities. The trust can also be used to pay for certain services or education and to provide a source of income for the disabled individual. Another type of Testamentary trust is a Pooled Income Trust. This type of trust pools money from multiple donors, allowing the beneficiary to receive payments in one lump sum or regularly. These funds can be used to pay for medical, educational, or housing expenses as well as to provide supplemental income. Testamentary trust funds can be used to provide for the care and support of individuals with disabilities, while protecting them from potential financial abuse. They are an important part of a comprehensive disability planning law in Pennsylvania.
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