During these uncertain times, you might be taking steps towards creating an estate plan and testamentary trust. Thoughts like, “how will things be executed if something were to happen to me?” could be coming up in your mind and we assure you that these thoughts are valid, especially during this unprecedented time.
If you have minor children, knowing that they’ll be taken care of when you’re not around is probably in your best interest. You can provide some security for your children by setting up a testamentary trust, or a trust fund for them.
What Is a Testamentary Trust, and How Does It Work?
A testamentary trust is a type of trust that’s created in a last will and testament. In this trust, there will be terms that are specified by you.
For instance, if you specified that $100,000 will go to your son’s college tuition and can’t be accessed until they’re 18, then the trust will terminate when your son receives this money.
The testamentary trust will not be put into effect until you die.
Who Does a Testamentary Trust Involve?
There will be three people involved in a testamentary trust:
- Grantor – the creator of the trust (in this case, you)
- Beneficiary – person or entity that receives the assets specified in the trust
- Trustee – handles and manages the trust until the beneficiary takes over
Creating a Testamentary Trust
Your executor will be the one to help you create a testamentary trust. When you pass, the trust will get handed over to your executor.
Your executor will submit the will and apply for a grant of probate. When the court grants probate to your executor, they will be authorized to execute their duties.
The executor will take care of all your legal and financial affairs, such as your funeral cost, filing tax returns, and opening a trust bank account.
Once the executor finishes with their duties, they will pass the trust over to the trustee to manage.
Need Help Creating a Testamentary Trust?
We hope you have a better understanding of what a testamentary trust does and how it could be something that you would want to take care of in advance.
For additional information or inquiries, don’t hesitate to reach Bearden Law. You can also call us: (816)-787-1979
We hope you are doing well and staying hopeful during this chaotic time!