Updated: Oct 9, 2019
Many people understand that by setting up a revocable living trust as part of a trust-based estate plan, they can simplify the probate of their estate when they die, lightening the load for their survivors. Not as many people may know that they can instead opt to put a testamentary trust inside of the Last Will & Testament of a will-based estate plan, which will subject the trust to probate court supervision.
Surprising to readers may be the fact that a mere provision inside a Last Will & Testament can qualify as a trust. A trust does not have to be a stand-alone document. Also surprising might be the idea of voluntarily subjecting a trust to probate court supervision. Considering that testamentary trusts are commonly used to provide for minor or disabled children, however, it is not surprising that court supervision may be desired.
A trust involves three parties: The trustor who creates the trust, the trustee who manages the assets held in trust (“corpus” or “res”), and the beneficiary for whom the trust is established. A testamentary trust will not take effect until the trustor dies, after which the estate executor will transfer property from the estate into the trust. While the testamentary trust is in effect, the trustee will manage the assets and the probate court will require periodic accountings.
The probate court may also be needed as problems arise. For example, if the appointed trustee declines to serve, the probate judge will appoint a new trustee, usually after holding a hearing to identify an appropriate person. At the trust's expiration, which is usually tied to a specific event such as the beneficiary graduating from college or attaining a certain age, the court will oversee the transfer of what remains in the trust to the beneficiary.
The word “testamentary” derives from the Latin testamentum, to bear witness, and witnesses remains central to what makes a will a will. (While including witnesses in the signing of revocable living trusts is recommended, it is not universally required.) In Connecticut, a Last Will & Testament must be witnessed and signed by two competent adults.
Witnesses help to ensure the validity of the document, and after overseeing many will signings over the years, I think of witnesses not as bystanders, but as active participants in a legacy-defining rite. This is especially clear when the will contains a testamentary trust.