A '____________ trust' is a trust created by will.

• A. Lifetime
• B. Guaranteed
• C. Beneficial
• D. Testamentary

Answer: (D)

Trusts can be formed during a person’s lifetime or through a will. A trust created by will is called a testamentary trust because its existence begins after the testator dies and the will is admitted to probate. The will directs that assets pass into the trust and the trustee then administers those assets for the beneficiaries under the terms of the will. This differs from a lifetime (inter vivos) trust, which is established and funded during the grantor’s life and becomes effective immediately. The other terms don’t describe creation by will, so they aren’t correct in this context.