Testamentary Trust

Definition - What does Testamentary Trust mean?

A testamentary trust is one that is created as a result of the terms in a will. When a person dies and has a trust set up in their will, it is often a testamentary type, where all the assets are sold and the remains are vested into the trust. The trust is then split between the beneficiaries.

The testamentary trust is the main body of the will in that all of the assets of that person will end up under the trust.

Justipedia explains Testamentary Trust

It is common that the bills or any outgoings owed by a person's estate are paid out before the remainder of the assets are placed within the testamentary trust. If the person dictates, there can be further terms regarding the split of assets, such as a requirement that the property is not sold but passed between the family.

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