Kansas Funeral Director Practice Exam

In legal terminology, what is the term for a trust that comes into play after an individual's demise?

1. Testamentary trust

2. Inter vivos trust

3. Living will

4. Power of attorney

The correct answer is: Testamentary trust

A testamentary trust is specifically designed to be established through a person's will and comes into effect only after their death. This type of trust allows for the distribution of assets according to the deceased's wishes, as outlined in their will. It may be used to manage the estate of the deceased, providing for beneficiaries over time or under specific conditions. In contrast, an inter vivos trust, often referred to as a living trust, is created during a person's lifetime and typically becomes effective immediately. While it can also provide for the distribution of assets, it does not wait for the individual to pass away to take effect. A living will is a legal document that outlines a person's wishes regarding medical treatment in situations where they may not be able to communicate their decisions, and it does not relate to asset management after death. Power of attorney grants someone the authority to act on another's behalf in legal or financial matters, and it typically ceases to have effect upon the individual's death. Hence, the testamentary trust is the only option that specifically operates posthumously, aligning with the legal requirement for trusts to be initiated after the individual's demise.