are testamentary trusts taxed at the highest rate
Background. Under the current rules, testamentary trusts â trusts created by will â are taxed at the same graduated rates that are applicable to individuals as compared to an inter vivos trust â a trust established during oneâs lifetime â which is generally taxed at the highest marginal tax rate for individuals. GRE may continue to be subject to tax at graduated rates for up to 36 months, provided the estate meets the following conditions: 1  it arose as a consequence of an individualâs death; 2  no more than 36 months have passed from the date of death; 3  the estate is a testamentary trust;