What is the primary purpose of a testamentary trust?

A testamentary trust is established through a will and comes into effect upon the death of the person who created the trust, known as the testator. The primary purpose of a testamentary trust is to hold and manage the assets of the deceased, distributing them according to the instructions specified in the will. This type of trust can provide clear guidelines for how assets are to be managed and distributed, often helping to ensure that beneficiaries receive their intended inheritance in a manner that aligns with the deceased’s wishes.

In contrast, the other choices refer to different concepts. Managing assets during a person’s life pertains more to living trusts or financial management strategies rather than testamentary trusts. Relieving probate issues can be a benefit of using a trust, but it is not the primary purpose of a testamentary trust; probate occurs when the terms of the will are carried out. Lastly, a living will specifically addresses health care decisions, which is distinct from the financial and asset distribution functions of a testamentary trust.