What is a testamentary trust and how does it work?

A testamentary trust is a type of trust that is created in a last will and testament. It is a legal document that is created to ensure that assets are managed and distributed in the way the testator (the person creating the trust) wishes after they pass away. In Texas, a testamentary trust is created when the testator designates certain assets they own to be placed in a trust. This trust is then managed by a trustee who is appointed to carry out the wishes of the testator. The trust assets can include everything from financial accounts to real estate, stocks, and investments. The trustee has control over these assets, and can manage them in accordance with the directions in the trust document. The trust will then designate where the assets are to be distributed when the testator passes away. This includes the distribution of money, property, or other assets to beneficiaries, such as friends, family, or charities. The trustee can also use the trust to provide instructions on how the assets are to be managed, such as when distributions will be made and in what amounts. In Texas, the trust and its terms are legally binding and must be followed by the trustee. The trust document must also be filed with the court system in order to be fully enforced. The trust documents can also be changed while the testator is still alive, giving them full control over their estate plan.

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