Testamentary trusts are ideal if you want your estate to be properly handled after your passing. Testamentary trusts are occasioned at a person’s death and are especially useful if you want to avoid disagreements for your next of kin. Typically, this trust is made in the form of a will to safeguard the trust for minors. Here at Your Corner we can provide testamentary trust services and advice so you can secure the future of your inheritors and those financially dependent on you.
The difference between a non-testamentary trust and testamentary trust lies in the time of its effectuation. Compared to a non-testamentary trust, a testamentary trust goes into effect immediately but is not set up until after the person’s passing.
Types of Testamentary Trusts
Primarily, there are two main kinds of testamentary trusts:
- Discretionary Testamentary Trusts – this type allows the beneficiary to manage their inheritance fully or partly as they have the right to change or remove the trustee. They may also assign the post of the trustee to themselves.
- Protective Testamentary Trusts – this type limits the beneficiary from choosing a trustee. He/she has no involvement in the management of assets. This type of trust is usually used if the beneficiary is a minor, disabled, very old or incapacitated.
In any case, Your Corner will lay down the best options for you, presenting all scenarios for you to take a look at before making any decision.
How Does This Trust Work?
Typically, a testamentary trust needs four parties to be involved for it to work
- Grantor: The grantor or the settlor is the person who specifies in his will for the trust to be created. The trust is occasioned at the time of his death.
- Trustee: This is the adult whose duty it is to carry out the terms of the testamentary trust. Either this person is specified in the will, or the probate court assigns this person.
- Beneficiary: is the one who will receive the benefits of the trust
- Probate Court: which oversees the trustees handling
Advantages of Testamentary Trust
Testamentary trust can provide you with the following benefits:
- Protects your estate until minors are of age and have the ability to handle wealth themselves
- Requires low setup and upfront costs
- Low marginal tax rates
- Enables you to handle your assets in the way you want even after your death
- The assets under the testamentary trust cannot be paid to creditors in case of bankruptcy
How Can Your Corner Help?
Your Corner helps you in setting up the testamentary trust in the following ways:
- Evaluates the total worth of your assets for you
- Determine a strategy to maximise the worth of your assets
- Provides you advice for testamentary conditions to be included in the will
- Help you make a foolproof deed that averts any succession issues
- Assist with paperwork
If you’re interested in Testamentary trusts, please speak to Your Corner today.