Testamentary Trust

What Does Testamentary Trust Mean?

A testamentary trust is a trust that is created upon a testator’s death, designating a specific amount or property to be held by a trustee for the benefit of a beneficiary. A trust, in general, is an arrangement where one person holds the title to property and manages it for the benefit of another.

Insuranceopedia Explains Testamentary Trust

An example of a testamentary trust is when a parent creates a trust in their will to leave a certain sum of money deposited in a bank for the educational benefit of their youngest son. In this trust, the parent may specify that funds will be released when the son turns 16, with periodic disbursements each year until he completes his college education. The remaining balance would be given to him when he reaches the age of 25.