Legal Definitions - testamentary trustee

A testamentary trustee is an individual or entity specifically named in a person's last will and testament to manage assets that are placed into a trust after the will-maker's death. This type of trustee's authority and responsibilities only begin once the will has been probated (legally validated) and the assets have been transferred into the trust as directed by the will. Their role is to hold, manage, and distribute the trust assets according to the specific instructions outlined in the will, for the benefit of designated beneficiaries.

Here are some examples illustrating the role of a testamentary trustee:

• Example 1: Providing for Minor Children

  Sarah, a single mother, writes a will stating that if she passes away before her children reach adulthood, a portion of her estate should be placed into a trust for their education and living expenses. She names her sister, Emily, as the testamentary trustee. Upon Sarah's death, Emily's role as trustee begins. She is responsible for managing the trust funds, investing them prudently, and distributing money for the children's school tuition, medical needs, and other specified expenses until they reach the age stipulated in Sarah's will, at which point the remaining assets might be distributed directly to them.

  This illustrates a testamentary trustee because Emily was appointed in Sarah's will, and her duties to manage the trust for the children's benefit only commenced after Sarah's death and the establishment of the trust through the will.

• Example 2: Supporting a Charitable Cause

  Mr. Henderson, a philanthropist, includes a provision in his will to create a perpetual trust, funded by a significant portion of his estate, to support local arts programs. He appoints the trust department of a reputable bank as the testamentary trustee. After Mr. Henderson's passing, the bank's trust department takes on the responsibility of managing the trust's investments, ensuring the principal grows, and distributing the income annually to eligible arts organizations as specified in Mr. Henderson's will, indefinitely.

  This demonstrates a testamentary trustee because the bank's trust department was designated in Mr. Henderson's will, and their authority to manage the charitable trust and distribute funds only became active after his death, as directed by his will.

• Example 3: Managing Assets for a Beneficiary with Special Needs

  David wants to ensure his adult son, who has special needs, is financially cared for without jeopardizing his eligibility for government benefits. In his will, David establishes a supplemental needs trust and appoints his long-time friend, Michael, as the testamentary trustee. After David's death, Michael assumes the role of managing the trust assets, using them to pay for services and items that supplement, rather than replace, government assistance for David's son, such as specialized equipment, recreational activities, or personal care items, according to the terms set out in David's will.

  This is an example of a testamentary trustee because Michael was named in David's will to manage a specific trust for his son, and his responsibilities began only after David's death, following the instructions laid out in the will.