What is a testamentary trust?

A testamentary trust is a type of trust established in a will that takes effect at the death of the grantor (the person who establishes the trust). In Maryland, a testamentary trust is usually set up to provide for a beneficiary upon the death of the grantor, and it is important to remember that the grantor can decide who the beneficiary should be. The grantor has the power to appoint people to manage the trust, including the trustee (who has a fiduciary responsibility to manage the trust’s investments and assets). The grantor also has the ability to decide how the trust should be managed. This includes deciding when and how the beneficiaries can access the trust’s funds or assets. In Maryland, a testamentary trust is generally revocable, meaning that the grantor has the power to modify or revoke the trust before death. Testamentary trusts are generally used to transfer wealth between generations, as the grantor can specify how the trust’s funds should be used for the benefit of a future generation, upon the death of the grantor. This can be used to protect the assets from tax liability, or to establish a trust to provide for a child’s future education or medical needs. In Maryland, a testamentary trust will only be valid if the will containing it meets the statutorily imposed requirements, such as being in writing and having a valid will signature. Testamentary trusts must also be created with the grantor’s wishes in mind, which must be expressed in the will.

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What is a testamentary trust?

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