What is a testamentary trust?

A testamentary trust is defined as a trust that is created within a will and comes into effect only after the death of the individual who wrote the will, known as the testator. This type of trust allows the testator to specify how their assets should be managed and distributed to beneficiaries after their passing. The trust is usually established to provide for minor children, manage assets for beneficiaries who may not be financially responsible, or ensure that assets are used according to certain conditions set by the testator.

The mechanism of a testamentary trust is particularly important because it allows for ongoing management of assets beyond the testator's life, which may be essential in situations where beneficiaries are unable to manage their inheritance directly due to age, capacity, or other reasons. Once the will is probated, the provisions outlined in the testamentary trust are enforced, and the appointed trustee administers the trust according to the testator's wishes.

In contrast to this, trusts mentioned in other options do not accurately capture the essence of a testamentary trust. For instance, a trust established after a court ruling would not necessarily be considered testamentary in nature, as it would likely arise from legal proceedings rather than the direct wishes of a decedent. Additionally, a trust that is automatically