What is a Testamentary Trust?

A testamentary trust is a legal arrangement created as specified in a person’s will, and is occasioned by the death of that person. It is created to address any estate accumulated during that person’s lifetime or generated as a result of the death itself, such as a settlement in a wrongful-death suit, or the proceeds from a life insurance¬†policy held on the settlor. A trust can be created to oversee such assets. A trustee is appointed to direct the trust until a set time when the trust expires, such as when minor beneficiaries reach a specified age or accomplish a deed such as completing a set educational goal or achieving a specified matrimonial status.