What is a testamentary trust?

A testamentary trust is a type of trust created in a will by an individual. The will typically outlines how the trust is to be administered and who will receive the assets of the trust upon the individual’s death. In North Carolina, a testator (the individual creating the trust) must sign a will in the presence of at least two witnesses. The witnesses must also sign the will in the presence of the testator and of each other. The testator typically names a trustee to manage the trust, a beneficiary to receive the assets of the trust, and an executor to be in charge of carrying out the testator’s wishes outlined in the will. The executor has the job of collecting the testator’s assets, paying off creditors, and distributing the remaining assets of the trust to the beneficiary according to the testator’s wishes. The assets of the trust can include real estate, stocks, bonds, personal property, and insurance policies. A testamentary trust can also provide benefits for a surviving spouse and provide for the care of minor children. The testator typically specifies the terms of the trust and the amount of money that is to be distributed to the beneficiary. The testamentary trust can provide the testator with peace of mind that their wishes will be carried out after their death. The trust is also beneficial since it allows the remaining assets of the testator to be managed and distributed in a way that is in accordance with their wishes, even after the testator has passed away.

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