What is the difference between a living trust and a testamentary trust?

A living trust and a testamentary trust are both types of estate planning trusts, but they have different purposes and characteristics. A living trust is a trust created while the grantor is still alive. The grantor transfers legal title of their assets to the trust, and a trustee manages them for the benefit of the trust’s beneficiaries. The grantor typically serves as the initial trustee, but can appoint another person or entity to serve in that role. Living trusts allow the grantor to control the disposition of their assets after their death. In Massachusetts, living trusts may be revocable or irrevocable, depending on the needs of the grantor. A testamentary trust is a trust that is created after the grantor’s death as part of their will. The will includes instructions on how the trust is to be set up, who will serve as trustee, and how the trust assets are to be distributed. In Massachusetts, testamentary trusts are generally revocable, meaning that the trust terms can be changed as long as the grantor is alive. The main difference between living trusts and testamentary trusts is that living trusts are created while the grantor is alive, whereas testamentary trusts are created after the grantor’s death. Living trusts also provide more control and flexibility to the grantor than testamentary trusts. However, testamentary trusts are subject to less taxes upon the death of the grantor than living trusts. Although living and testamentary trusts both have their advantages and disadvantages, each type of trust can be used to help an individual plan for their estate in Massachusetts.

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What is the difference between a living trust and a testamentary trust?

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