Testamentary Trustee: What Is a Testamentary Trustee?

Today we’re continuing in the theme of estate planning and we’re talking about the testamentary trustee. We’ll be covering what a testamentary trustee is, what they do, and what to consider when selecting a testamentary trustee.

Testamentary Trustee: What Is a Testamentary Trustee?

We’ve talked about trustees before but let’s recap quickly.

What is a Trustee?

A trustee is a person or an entity that holds or administers property for a third party. It is a trustee’s job to safeguard and responsibly manage assets for the third party and any decisions they make in regard to the assets in their care must be made with the best interest of the third party in mind. A good example of a trustee would be an uncle who manages money left in trust to his nephew. The child’s mother stipulated that at the age of 26, her child will be allowed to access the money in the trust. If she dies before her child turns 26, however, she has named her brother the trustee for that account. This means that her brother will manage the trust for his nephew until he turns 26 and is permitted access to the money.

So, What is a Testamentary Trust?

When we talk about a testamentary trust, we are talking about a trust that is established in the will of the deceased. This is the opposite to a living trust. A living trust is set up while the grantor is still living. For example, the mother in the example above may have set up a trust when her child was born with the intention of adding to that trust fund as her child grew. Then, upon her passing, that trust would be maintained by her brother until her child was old enough to meet the requirements outlined in the trust. This type of trust does not go through probate court when the grantor passes away.

Now, a testamentary trust, however, is one where assets are passed to the trust via the will of the grantor. For example, the mother we have been referencing would indicate that upon her untimely death, certain assets would be put into a trust for her child and this trust would be managed by her brother. This means that her brother is the trustee. However, because the trust was not funded until after the mother’s death, the assets that are to pass into the trust must go through the probate process. During this process, the court officially appoints the testamentary trustee of the trust. In most cases, the testamentary trustee is the individual named in the last will and testament…so in this case, the mother’s brother. This is not always the case, though. If, for example, the person appointed as a trustee does not meet the necessary qualifications to serve as a trustee – perhaps they have a neurological illness that prevents them from being able to carry out their duty, If someone is deemed unable or ineligible to serve as a trustee, the court will choose someone that they deem fit for the position.

Since the testamentary trustee has been officially appointed by the court, they are held responsible for their duties by the court. This means that they must report to the court periodically in regard to the current status of the trust.

It is possible for more than one trustee to be named and in this instance, they will serve as co-trustees.

Do You Need Advice On Selecting a Testamentary Trustee?

Do you need assistance with estate planning or advice on selecting a testamentary trustee for your estate? If so and if you live in the St. Pete, Florida area, Weidner Law is here to help you. Begin by setting up your consultation appointment today by calling us at 727-954-8752.

Read more about trusts in these articles from our blog:

Testamentary Trustee: What Is a Testamentary Trustee?