What is a testamentary trust?

A testamentary trust is a type of trust created by a will after the death of the testator or person making the will. In a testamentary trust, the will of the decedent is used to direct assets or money from their estate to be held in trust for the benefit of beneficiaries or other purposes. These trusts are often used to set aside funds for the care of minor children, pay debts and taxes, or provide for long-term care for dependent individuals. In California, a trust must be created for the benefit of at least one beneficiary, and the beneficiary must receive bona fide consideration (assets or money). The grantor of the trust must also name a trustee and a successor trustee, if applicable. The trustee has the responsibility to administer the trust in accordance with the terms of the trust. The terms of the trust may grant control over assets to the trustees or to other parties or advisors, as prescribed by the grantor. Testamentary trusts are not only used to pass on assets but also to provide for an orderly transfer of assets from one generation to another, provide for tax planning, and create incentives for future generations to pursue beneficial activities.

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What is a testamentary trust?

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