What defines a testamentary trust?

A testamentary trust is specifically defined as one that is created through a will and comes into effect only after the death of the trustor. This type of trust allows the trustor to dictate how their assets will be managed and distributed to beneficiaries, providing a mechanism to control the timing and manner of asset distribution after their passing.

The creation of a testamentary trust is an important estate planning tool, as it can address various issues such as protecting minor beneficiaries, managing assets for beneficiaries who may not be financially responsible, or ensuring that certain conditions are met before beneficiaries receive their inheritance. Essentially, it serves to fulfill the wishes of an individual regarding their estate once they are no longer alive.