A testamentary trust is a trust contained in a last will and testament that provides for the distribution of all or part of an estate and often proceeds from a life insurance policy held on the person establishing the trust.
In a testamentary trust, the trustee's function is to serve as guardian and manager of trust assets. The trust document will often describe specific powers granted to a trustee, but those powers may also be affected by state law.
Unlike testamentary trusts, non-testamentary trusts can either be revocable or irrevocable trusts. The difference between these two types of trusts is whether the grantor retains the right to change the trust once it has been created.
A testamentary trust is a trust created in a will, unlike living trusts that are created while you are alive. Living trusts can be revocable, meaning you can cancel the trust and take your property back, or irrevocable, but both allow you to put property into the trust while you are alive.
A testamentary trust can lose its status as a testamentary trust for tax purposes if any property is. contributed to it by anyone other than the deceased individual as a consequence of that individual’s death. Directions for the creation of a testamentary trust and the terms of the trust should be...