What is a Testamentary Trust?

A Testamentary Trust is one that is created by a Will or that becomes irrevocable only when the grantor dies. For example, a sole proprietorship of a business might choose to place his business in a trust that he can revoke or amend at any time prior to his death and where he is the beneficiary until his death. Or, he could create a trust and leave the business in the trust in his Will. These arrangements allow him to change who will inherit the business by changing the persons who will be the beneficiaries after his death rather than changing his will. This type of trust will be a Grantor Trust before the sole proprietor dies.

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