What is a Testamentory Trust?
Testamentary Trust
A Testamentary Trust is a trust that goes into effect once the grantor or trust maker passes away. A Testamentary Trust is created through the grantor’s last will and testament. A Testamentary Trust is irrevocable, so once its terms go into place they cannot be changed. A Testamentary Trust differs from living trusts because it does not go into effect until after the grantor has passed away. Living Trusts go into effect as soon as they are signed.
Why Use a Testamentary Trust?
A Testamentary Trust is often used when the grantor wants to leave assets or properties to their beneficiary, but they do not want these assets released to the beneficiary until a specific time. An example of when a Testamentary Trust may be used is when a parent creates a trust, leaving money and property to their child as the beneficiary, but they do not have the assets released to the child until a specific time in the future, when the child would now be an adult and more responsible and able to manage the assets.
Differences Between Testamentary Trusts and Revocable Living Trusts:
With Testamentary Trusts, your estate will still have to go through probate law because the trust is created through the statements in your will. This means that your Testamentary Trust will be a part of the public record, like any other will that goes through probate. There is also no way to build in care for yourself when you reach old age through a Testamentary Trust because the trust is technically not created until you die. This is unlike a Living Trust, because in a Revocable Living Trust you can name a disability trustee who will oversee your trust and your care as you get older and lose the physical, and or, mental capacity to control the trust yourself.
Why Use a Testamentary Trust over a Standard Will?
A Testamentary Trust differs from a standard last will and testament because it allows you to have your assets distributed to your beneficiaries incrementally throughout their lifetime. A regular will has your assets transferred to your beneficiary all at once. As stated earlier, a Testamentary Trust is a good choice if your beneficiary is not old enough to be responsible for handling your assets if you were to pass. It helps them avoid receiving a large sum of money all at once, when they are too young to be able to handle it responsibly.
A Testamentary Trust may be preferable for providing for children in the event that a parent passes away unexpectedly. In these cases, it can dictate the terms of how the children are provided for. An attorney can provide qualified advice as to the most appropriate options.
What are the Next Steps?
Every state has different stipulations for trusts. If you want to create a Testamentary Trust, you should go to an estate planning attorney who can ensure that your trust meets the standards for New Jersey trust laws. An estate lawyer can also help make sure that the terms of your trust are clear and will be able to be executed properly once you pass. Trusts are a complex legal topic, so it is important that if you want to create a trust, you are going through an estate attorney who is adept in this field.
Why Use a Testamentary Trust?
A Testamentary Trust is often used when the grantor wants to leave assets or properties to their beneficiary, but they do not want these assets released to the beneficiary until a specific time. An example of when a Testamentary Trust may be used is when a parent creates a trust, leaving money and property to their child as the beneficiary, but they do not have the assets released to the child until a specific time in the future, when the child would now be an adult and more responsible and able to manage the assets.
Differences Between Testamentary Trusts and Revocable Living Trusts:
With Testamentary Trusts, your estate will still have to go through probate law because the trust is created through the statements in your will. This means that your Testamentary Trust will be a part of the public record, like any other will that goes through probate. There is also no way to build in care for yourself when you reach old age through a Testamentary Trust because the trust is technically not created until you die. This is unlike a Living Trust, because in a Revocable Living Trust you can name a disability trustee who will oversee your trust and your care as you get older and lose the physical, and or, mental capacity to control the trust yourself.
Why Use a Testamentary Trust over a Standard Will?
A Testamentary Trust differs from a standard last will and testament because it allows you to have your assets distributed to your beneficiaries incrementally throughout their lifetime. A regular will has your assets transferred to your beneficiary all at once. As stated earlier, a Testamentary Trust is a good choice if your beneficiary is not old enough to be responsible for handling your assets if you were to pass. It helps them avoid receiving a large sum of money all at once, when they are too young to be able to handle it responsibly.
A Testamentary Trust may be preferable for providing for children in the event that a parent passes away unexpectedly. In these cases, it can dictate the terms of how the children are provided for. An attorney can provide qualified advice as to the most appropriate options.
What are the Next Steps?
Every state has different stipulations for trusts. If you want to create a Testamentary Trust, you should go to an estate planning attorney who can ensure that your trust meets the standards for New Jersey trust laws. An estate lawyer can also help make sure that the terms of your trust are clear and will be able to be executed properly once you pass. Trusts are a complex legal topic, so it is important that if you want to create a trust, you are going through an estate attorney who is adept in this field.