What is the difference between a living trust and a testamentary trust?

The basic difference between a testamentary and a living trust is when the trust is organized.  A testamentary trust is established when the grantor dies, whereas a revocable living trust is established while the grantor is still alive.

A testamentary trust is part of a person’s Will.  As a result, it cannot come into existence until the Will enters the probate process.  Testamentary trusts are seldom used since avoiding probate is a high priority for most well-established plans.

Both a revocable living trust and a testamentary trust are revocable during the grantor’s lifetime. Both types of trusts become irrevocable once the grantor dies.

Note:  Technically, married individuals who create a living trust that includes A/B Provisions have a testamentary trust inside their living trust, as the B Portion of the A/B trust is not established until the first spouse's death.  In this case, the testamentary trust is not created by a Will, so no probate is required.