What is a Testamentary Trust?
When a person drafts a will, sometimes they do not want the inheritance to go immediately upon their death to a spouse or child. Instead, they want the property to be managed for the beneficiary’s protection over an extended period of time. One way to accomplish this is to state in the will that upon the maker’s death a Testamentary Trust will be created to manage the inheritance for the beneficiary. A Testamentary Trust, like a will, is legally effective only after one dies and cannot provide any estate planning protections to you or your family during your lifetime.
Testamentary trusts are created in wills and like wills they are court supervised as part of the required probate court proceedings. This supervision continues until the probate is ended. This means that if you created a testamentary trust to manage assets for your children until they turned thirty years old, your family would have to deal with probate court proceedings year after year until your youngest child turned thirty. The best estate planning attorneys seldom use testamentary trusts because of this negative consequence. Instead, “Living Trusts” are the legal tool of choice for the estate planning needs of most people.