One of the advantages of a living trust is that the assets held within it are not subject to probate, which can be a complicated, drawn-out and costly process. As such, many people automatically choose living trusts as they plan their estates. But there is another type of trust: a testamentary trust. While probate is involved, it may be the preferable option under certain circumstances.
Essentially, a testamentary trust is one that does not take effect until the death of the trust maker, at which time it becomes irrevocable. The trust is usually contained within a will. Often, a testamentary trust is created to benefit loved ones who are minors or who struggle with disabilities. Often called “child trusts,” testamentary trusts can be changed by the grantor during his or her lifetime, and they last for a designated term.
A designated lifespan for a testamentary trust allows the grantor to tailor the trust to deliver its proceeds to beneficiaries at a certain time — say, when they turn 21, graduate from college or get married. The lifespan of the trust runs from the death of the grantor, or “settlor,” to its expiration. During that time, the probate court checks up on the trust to ensure that its affairs are being handled properly.
The trustee (the person who actually handles the affairs of a testamentary trust) is usually someone the trust maker deems trustworthy. Because the trustee does not necessarily have to honor the expenditure terms detailed in the will, it is important to choose someone who will act in the best interests of children and other beneficiaries.
Because a will maker may wish to have different assets apportioned to specific beneficiaries with different terms, there may be more than one testamentary trust per will.
An experienced estate-planning attorney like Lisa McDevitt in Fairfax, Virginia can help draw up an appropriate testamentary trust to fit specific objectives and needs.
Contact an estate planning lawyer with the McDevitt Law Office of call 1-571-223-7642.