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Testamentary vs. Living Trusts

Trusts Created While You're Alive vs. After Your Death


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When you're putting your estate plan together, you'll need to understand the difference between testamentary trusts and living trusts.

Testamentary Trusts

A testamentary trust is simply one that's not created until after you die. It can be established under your Last Will and Testament, Revocable Living Trust, or Irrevocable Life Insurance Trust. In addition, all testamentary trusts are irrevocable and can't be changed - in other words, since a testamentary trust is created after you die, then you can't possibly have the ability to amend or revoke it.

Living Trusts

A living trust, also referred to as an "inter vivos trust" (meaning "a trust between the living" in Latin), is simply one that's created and funded during your lifetime. This includes both revocable and irrevocable trusts. Whether a living trust is revocable or irrevocable will depend upon how the trust has been drafted and what is the overall purpose of the trust.

What Terms Do Estate Planning Attorneys Use?

Estate planning attorneys rarely use the term "testamentary trust" with their clients, but they'll often use "living trust" to refer to a client's basic Revocable Living Trust. Also, estate planning attorneys won't refer to an Irrevocable Life Insurance Trust as a "Living Irrevocable Life Insurance Trust" because most clients will confuse it with their Revocable Living Trust, but technically an Irrevocable Life Insurance Trust is a type of living trust.

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