Which instrument creates a testamentary trust?

• A. Deed of trust
• B. Court decree
• C. Mortgage
• D. Will

Answer: (D)

Testamentary trusts are created by a will. The will lays out the trust provisions, names a trustee, and specifies how assets should be managed and distributed after the testator’s death. A living (inter vivos) trust, by contrast, is formed by a trust agreement during the person’s lifetime. The other instruments listed—deed of trust, mortgage, and court decree—do not create a testamentary trust. A deed of trust and a mortgage are real estate loan security instruments, and a court decree is a judicial order.