What is a testamentary trust and how does it work?

A testamentary trust is a common estate planning tool used in Florida. It is a trust that is established through a written document, such as a will. The trust contains instructions of how you would like your assets to be managed and distributed after you die. Essentially, a testamentary trust works by taking effect only after the death of the grantor (the person who created the trust). The grantor establishes instructions within the trust to identify who will receive the assets contained within. In some cases, the grantor can also appoint a trustee to manage the trust and to ensure that those instructions are followed. When the grantor dies, the assets within the trust become the property of the trust. The trustee has a legal obligation to manage and distribute the assets according to the instructions in the trust document. For example, the trustee might be instructed to give a certain amount of money to a particular person, or to use the funds to pay for a particular purpose or expense. The trust can take effect immediately after the grantor’s death, or it can be designed to become active only after a certain date. Testamentary trusts can be a great way to ensure that your money is used according to your wishes, even after you are gone.

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What is a testamentary trust and how does it work?

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