A testamentary trust is a trust created by your will. It does not exist while you are alive and holds nothing until your death. Then your executor funds it from your estate, and the trustee you chose manages the money under the rules you wrote.
Why families use them
- Minor children. Without a trust, a child's inheritance may require a court-supervised guardianship of the estate, and the child typically receives everything outright at 18. A testamentary trust lets a trustee you chose manage the money and distribute it at ages you choose.
- Beneficiaries with special needs. A supplemental needs trust in the will can preserve eligibility for SSI and Medicaid.
- Protection. Spendthrift language shields the inheritance from a beneficiary's creditors, and structuring it well helps keep it separate in a divorce.
- Beneficiaries who struggle with money or addiction. The trustee can pay for needs directly rather than handing over cash.
How it compares to a living trust
- Upfront cost
- Testamentary: lower; it is part of the will. Living: higher, and assets must be retitled during life.
- Probate
- Testamentary: the will must be probated to fund it. Living: avoids probate for funded assets.
- Incapacity
- Testamentary: no help; it does not exist yet. Living: successor trustee can manage.
- Privacy
- Testamentary: the will becomes public. Living: the trust terms usually stay private.
In Texas, where probate is comparatively efficient, a will with a testamentary trust — paired with powers of attorney for incapacity — is often the practical choice for young families.
Key decisions
- Who is trustee, and who serves if they cannot. A relative, a trusted friend, or a professional trustee.
- When distributions happen. For example, one-third at 25, half the rest at 30, the balance at 35 — or held for life with discretion.
- What the trustee may pay for. Health, education, maintenance and support is a common standard.
- Separate trusts or one “pot.” One shared trust lets a trustee spend more on a younger child who still needs college, much as parents would.
A testamentary trust only receives what passes under your will. Life insurance and retirement accounts pass by beneficiary form. To send them into the trust, the forms must name the trustee of the testamentary trust. See our guide to beneficiary designations.
Common questions
Is a testamentary trust supervised by the court?
Generally no, not on an ongoing basis in Texas. The trustee owes fiduciary duties to the beneficiaries and must account to them, and beneficiaries can go to court if a trustee misbehaves.
Can I change it?
Yes. It is part of your will, so you can change it any time before death by updating the will.
This guide is general information about Texas law as of September 2026, not legal advice for your situation. Laws and dollar figures change, and small facts change outcomes. Reading it does not create an attorney-client relationship. Grover C. Peters III is responsible for this content.