Trusts are estate-planning tools that can replace or supplement wills. Trusts also help manage property during life. A trust manages the distribution of a person’s property by transferring its benefits and obligations to different people. Different types of trusts include testamentary trusts, living trusts, AB trusts, and charitable trusts.
A testamentary trust is a trust created within a will. Testamentary wills do not take effect until the death of the grantor. Testamentary trusts are used chiefly by wealthy individuals who are concerned about their beneficiaries’ ability to administer large amounts of assets.