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Quick Answer. A residuary trust, also known as a B-trust, is the second part of a two trust arrangement that is created for the benefit of the trustor's spouse, states InvesterWords. This trust fund is not considered part of there estate, and is therefore not taxable to the trustor or the surviving spouse. Continue Reading
Testamentary Trusts. 1  A testamentary trust is one that is set up by a will and goes into effect when the trustor dies. Since it is not from the assets of the client, a testamentary trust is a type of 3rd party trust. 2  An individual has no control over the establishment of a testamentary trust, so the department counts only the income received.