A testamentary trust is an alternative to an inter vivos trust. An inter vivos trust is created during your lifetime. A testamentary trust is created in your last will and testament. The trust is created in the will to go into effect after your death. You can designate that the trust will inherit some or all of your estate, and/or that the trust will be paid the proceeds of your life insurance policy.
There are many reasons why you may wish to create a testamentary trust. However, there are also many other legal tools that you could consider using instead of or in addition to this type of trust.
To ensure that you make the right choices for your legacy plan and that you use trusts in the wisest way possible, you should work with an Ohio trust lawyer to make your estate plan. Zimmer Law Firm can provide you with invaluable assistance in creating a trust so you can use the best legal tools to accomplish whatever your goals are for providing for your loved ones after you are gone.
How Does a Testamentary Trust Work?
Testamentary trusts can be created when you draft your will, by including appropriate language in your will. Typically, you will include language in your will indicating that you are appointing a trustee in order to manage the money or property in the trust on behalf of a beneficiary.
The beneficiary is the person who you are ultimately leaving the money or property to provide for. The trustee can manage the assets indefinitely on behalf of the beneficiary, or can manage the assets until a designated time period until those assets are fully transferred to the beneficiary.
You can create a testamentary trust if you are going to be leaving money to someone who is under the age of 18 and who thus cannot directly inherit and manage the funds that you plan to leave to that person. You may also wish to create a testamentary trust if you are going to be leaving money or property to someone who is disabled, or to someone who you otherwise do not feel confident will be able to effectively take over managing the assets you leave to him.
The testamentary trust can remain in effect for as long as your instructions specify. For example, if you are leaving money to a child, you may specify that the trust will remain in effect until the child turns 21 or until the child marries.
Why Should You Create a Testamentary Trust?
Creating a testamentary trust gives you the opportunity to determine who will be in charge of managing the assets you have left for someone who you do not feel is able to manage them on his or her own. The trustee who you name will have a fiduciary duty to act in the best interests of the beneficiary. You can select anyone who you trust to serve as the trustee, so you can be confident that the person will be well-equipped to manage the wealth and trustworthy enough to use it as you see fit.
If you do not create a testamentary trust and you leave money to someone who is not legally able to take control over the assets, like a child or a severely disabled person, then the court could be forced to appoint a guardian. The court would then oversee the actions of the guardian in managing the funds. The guardian could be someone different than you would have chosen, and the continued involvement of the court could be burdensome and unwelcome to your family members. You should take control over choosing who you trust to manage the money, rather than leaving it to a judge to decide.
Getting Help from A Cincinnati Trust Lawyer
Zimmer Law Firm provides assistance to clients in making a comprehensive estate plan that makes wise and strategic use of trusts and other legal tools. We can help you to determine if it makes sense for you to create a testamentary trust and we can assist you in creating a will that establishes this type of trust. We can also help you to identify other trusts and other estate planning tools that can work to accomplish your goals.
To find out more about the ways in which our legal team can assist you, download our estate planning checklist. You can also give us a call at 513.721.1513 to speak with a Cincinnati trust lawyer to get the assistance you need with trust creation and more. Give us a call today to get started.