Question

Cord’s will created a trust to take effect on Cord’s death. The will named Cord’s spouse as both the trustee and personal representative (executor) of the estate. The will provided that all of Cord’s securities were to be transferred to the trust and named Cord’s child as the beneficiary of the trust. Under the circumstances:
A. Cord has created an inter vivos trust.
B. Cord has created a testamentary trust.
C. the trust is invalid because it will not become effective until Cord’s death.
D. Cord’s spouse may not serve as both the trustee and personal representative because of the inherent conflict of interest.

Answer 1

Answer:

The correct answer is B. Cord has created a testamentary trust.

Explanation:

A testamentary trust is a legal and fiduciary relationship created through explicit instructions in the will of a deceased. A testamentary trust becomes effective upon the death of a person and is commonly used when someone wants to leave assets to a beneficiary, but does not want the beneficiary to receive those assets until a specific time. A testamentary trust is irrevocable after the death of the testator. It is also called Will Trust.