What is a Testamentary Trust?
Testamentary trusts are trusts created by a person's will and take effect after his or her death. One of the reasons a person may want to create a testamentary trust is that it permits him or her to control how trust property is given to the beneficiary. For example, the beneficiary may be a minor at the time of the settlor's death. Rather than receiving all of the inheritance immediately, a trust would insure that a trustee hold and manage the inheritance until the beneficiary is 21 (or whatever age the settlor decides) and presumably responsible enough not to squander the inheritance.