Accredited Asset Management Specialist (AAMS) Practice Test – Prep & Study Guide

A testamentary trust is a specific type of trust that is created through a will and becomes effective only upon the death of the person who established it, referred to as the trustor. This means that the provisions laid out in the trust are not actionable until the trustor has passed away, at which point the trust is funded and administered according to the instructions specified in the will.

The key characteristic of a testamentary trust is its reliance on the trustor's death as the trigger for activation; this differentiates it from other types of trusts, such as living trusts, which are established during the trustor's lifetime and can be managed immediately. Such trusts can include specific instructions for distributing assets to beneficiaries, managing debts, or other estate planning goals that can only be realized after the trustor's passing.