A lot of people know what “living trusts” are. However, how many know what a “testamentary trust” is? A testamentary trust is simply a trust that takes affect AFTER DEATH. Usually this is done by creating a will and within that will creating the trust language which will take affect after death and after probate.
A testamentary trust does go through probate which a lot of people seek to avoid so they are certainly not right for everybody. However, they are typically less expensive to set up and thus work very well for you young families. That is, young families who want to protect their kids with a will and other planning documents but simply can’t afford the living trust.
A testamentary trust can be the beneficiary for life insurance, IRAs, 401k’s and other death benefits.
A testamentary trust can have all the same provisions of a living trust but with less set-up costs since assets are not transferred into the trust during life.
Beyond the advantage of costing less than a living trust a testamentary trust is advantageous if you want your estate to go through probate. A minority of people prefer this as it does cut off liability sooner than with a living trust.
Contact Me to discuss if a testamentary trust would be right for you.