Testamentary Trust: A Trust Created by Your Will

The Short Answer

Think of a testamentary trust as instructions inside your will that switch on at death. Rather than leaving money to a young or vulnerable beneficiary outright, the will pours their share into a trust with rules you set, such as “hold it until age 25.” It is one of the simplest ways to add control to a will, and it is a common alternative to a full living trust for younger families.

How It Works

1. You include the trust terms in your will: who the trustee is, who benefits, and the rules for distributions.
2. At your death, your will goes through probate like any other will.
3. After probate, the assets meant for the trust are transferred into it, and the trustee takes over.
4. The trustee manages and distributes the assets according to your instructions until the trust ends, such as when the child reaches the age you set.

Because it lives inside the will, a testamentary trust also lets you name a trustee to manage a child’s money and, separately in the will, a guardian to raise the child.

Testamentary vs. Living Trust

See the fuller comparison in how a revocable living trust works and types of trusts.

When to Use One

A testamentary trust fits when you want the control of a trust without paying for a full living trust now, most often to manage a young child’s inheritance. It also works to stagger distributions or provide ongoing support. If your estate is larger, or you also want to avoid probate and plan for incapacity, a living trust is usually the stronger choice. An estate planning attorney can tell you which fits your family.