What is a trust and how does it differ from a testamentary trust?

• A trust could be described as an obligation to another person or people. It is created by a trust deed during a person’s lifetime. It usually involves assets being set aside for the benefit of others.
• A trust consists of at least one trustee and at least one beneficiary (a person who receives a benefit from the trust).
• The trustee is the legal owner of the trust’s property and they are legally obliged to hold the property for the benefit of all beneficiaries according to the terms of the trust deed.
• On the other hand a testamentary trust is created by a will and does not come into effect until the date of death. A testamentary trust is typically set up for the benefit of minor or disabled children of the testator or a surviving spouse.
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