A testamentary trust is similar to a living trust except it is created AFTER the Will's creator passes per a last will and testament's instructions.
Assets are transferred into the trust via a last will and testament's distribution instructions.
The testamentary trust is managed by a trustee or several trustees named by the testator of the will. The trustees may be family members, friends or a professional trustee service called a "corporate trustee".
One of the most common uses of a testamentary trust is to withhold distributions to young beneficiaries until they reach a certain age. Distributions can be made to young beneficiaries or their guardians for reasonable health, education, maintenance or support needs if approved by the trustee.
The trustee of the trust can be the same person as the children's guardian or the trustee can be a separate person to provide a system of "checks and balances". Sometimes an asset such as a home is left to be used by a surviving spouse, children or other family members before being distributed at a later point to beneficiaries. This use of a trust is for creating a "life estate".
If a married couple faces estate taxes, a testamentary trust can allow each spouse to claim an individual estate tax exemption, rather than "sharing" an exemption.
A testamentary trust does not help assets avoid probate. If probate is not a concern, a testamentary trust may fulfill many goals for families. Otherwise you may want to consider a living trust.