What Is A Testamentary Trust Will
A testamentary trust is a trust that only takes effect after the death of a testator. A testator can add one or several testamentary trusts in the Last Will and Testament. You can add a trust for a minor child, a trust for a child with disability and even one for your spouse. You can also add a testamentary trust for a spendthrift minor or an adult child to you Will. That means that the assets that could have been distributed to heirs after the death of the testator will instead be held in the trust for the benefit of those heirs. The role of the trustee you name will be to distribute those assets according to the terms of the trust.
Benefits Of Testamentary Trusts
A testamentary trust gives the testator control over how the testator’s assets are distributed. This is important for people that have minor children or grandchildren or heirs that do not have the capacity to be financially responsible. That is why some people make the Testamentary Trusts last for a finite number of years. For example, you can make the trust last until a young beneficiary becomes an adult. A testamentary trust can also last for an unlimited period of time allowing the beneficiary to take control of the trust as trustee.
The spendthrift language in most testamentary trusts protects the assets of a beneficiary from the beneficiary’s creditors. Assets held under a Testamentary Trust cannot be used to pay a creditor, which means that the maximum amount of your estate is passed to your loved ones. However, Testamentary Trusts in a Will have to go through probate so that the testator’s assets can be transferred to the trust.
Requirements For Creating A Trust In Texas
You must have the intent or goal to create a trust document for the purpose of protecting your assets. Another requirement is that you must name a trustee or the controlling party of your trust. This can be your lawyer, family member, or a party with financial management experience. The trustee’s main purpose is to distribute the assets in the trust to beneficiaries in accordance to the terms of the trust document. You as the creator of the trust or testator or settlor should describe all the duties the trustee has to carry out and how the trustee should carry them out. The testator must also be of sound mind while creating the trust and the trust should be set forth in writing for it to be valid.
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You Need To Work With An Attorney
An experienced Texas estate planning attorney and a financial adviser can help you make important decisions such as choosing a designating power of attorney. A skilled lawyer can help you use clear and unambiguous language in your Will so that the assets that you choose to be transferred to the Trust will benefit the person you want the assets to benefit. Your financial adviser can help you update your retirement accounts, pensions, life insurance and brokerage accounts. The adviser can also help you figure out how to fund a Testamentary Trust.