A testamentary trust is a trust created under the terms of a will that does not come into being until the grantor’s death. A testamentary trust must have a valid will in writing, properly signed and witnessed. The testator must be at least 18 years of age and of sound mind. The testator must know and understand what is contained in the will and she must do with the property.

A testamentary trust forces probate of the will and can unnecessarily increase the cost of creating the trust. There is a risk of a testamentary trust being subject to the supervision of the probate court. However, testamentary trusts, like all trusts, are usually exempt from probate court supervision. Including testamentary trust terms in the will makes the trust a public document. Use a testamentary trust to:

1. Care for a client who has strong feelings about a will and the need for a living trust is remote.

2. Keep planning simple with a testamentary trust as opposed to the in depth planning of a typical living trust.

3. Help in Medicaid planning since living trust assets will be countable for Medicaid purposes as a Medicaid Qualifying Trust.

Action Steps
The best contacts and resources to help you get it done

Find testamentary trust information from a testamentary trust expert

Since a testamentary trust works with a will, getting the right professional advice about when and if to use a testamentary trust is important. Because testamentary trusts go through probate, this type of trust could end up costing more time and money in the long run.

I recommend: Use Findlaw.com by keying in the words "Trust and Estate" in the "Legal Issue" field and then your state to find trust experts near you. Try Martindale.com by clicking on "Trusts and Estates" for areas of practice and the state in which you live.

Create testamentary trust documents with online tools and resources

You can produce testamentary trusts yourself with the right online tools and forms. Do it yourself trusts are also a great resource when time is an issue and a trip to the attorneys office isn't possible.

I recommend: Testamentary trusts are part of a will. USLegal and Legalzoom.com have online documents for wills and living wills for a set fee.

Work with testamentary trust experts when you're not sure if a testamentary trust is right for you

During life's most difficult moments, it's nice to have your questions answered and the right documents prepared ahead of time. This is especially important if you or your loved one needs Medicaid planning. Get reliable testamentary trust advice and testamentary trust management service from experts in trust work for the most comprehensive plans available.

I recommend: Dickinson Wright is a Michigan based organization with offices throughout the state as well as in Washington DC and China. Holme Roberts & Owen has offices in Colorado, California, London and Munich. Both firms are leaders in the area of trusts and estates.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When a client lacks capacity to make a trust, consider executing a will with testamentary trust since it takes less capacity to make a will than for a revocable trust.
• •  A challenge to a testamentary trust is subject to a jury trial because a contest of the underlying will would be subject to a demand for jury trial.