What is a testamentary trust?

A testamentary trust is specifically defined as a trust that is established through a will and does not take effect until the grantor, or testator, passes away. This type of trust is designed to manage and distribute the testator's assets according to the terms outlined in the will after their death. The testamentary trust allows the testator to specify how and when the assets will be distributed to beneficiaries, which can include provisions for minor beneficiaries or those who may not be financially responsible. Consequently, this structure provides control and protection over the assets long after the testator's passing.

The other options describe different types of trusts or characteristics that don’t align with the definition of a testamentary trust. A trust created during the grantor's lifetime refers to living trusts, which are different and can be either revocable or irrevocable. A revocable trust, by its nature, can be altered or revoked during the grantor's lifetime, distinguishing it clearly from the permanent disposition seen in testamentary trusts. Lastly, a trust that cannot be changed, often referred to as an irrevocable trust, signifies a lack of flexibility that is not applicable to testamentary trusts, which are inherently only established upon the death of the grantor and based on the provisions of