To many, trusts may seem abstract and abstruse. Yet, they can be essential in ensuring your assets are protected and appropriately distributed to your love ones after you are gone. This insight looks at testamentary trusts, their benefits and how you can establish one in your will. If you think a testamentary trust is right for you, please contact us at Standard Law Co and we will assist you in including provisions to establish a testamentary trust in your will.
What is a Testamentary Trust?
To start, a trust is an obligation enforceable in equity whereby one or more persons (trustee) holding proprietary rights in respect of certain assets undertake to account for the said trust property or to deal with it exclusively in the best interests of a defined class of beneficiaries.
A testamentary trust is a type of trust that is created by a will. It does not come into force until the death of the testator (the person making the will) and can continue for 80 years. When this occurs, the assets of the testator are transferred to the trustee, or executor, of the trust. The assets can be specified in the will, a designated portion of the estate or the remainder of your estate. The trustee will deal with those assets at their discretion but must act within the rules of the trust deed (which are included in the will). You can have more than one trust in your will.
Beneficiaries of a testamentary trust are usually the spouse and/or descendants of the testator. Usually, the trust is discretionary, meaning the trustee will decide which of the beneficiaries, if any, will receive any income or capital from the testamentary trust and the amount that they will receive. Of course, trustees must act according to terms of the trust deed. You can decide how the assets of the trust are to be dealt with and what the trustee can and cannot do.
What are the benefits?
How can you set one up?
If a testamentary trust sounds right for you, please get in touch with our lawyers at Standard Law Co. We can assist you in drafting your will to include these provisions. We will ensure that they are tailored to your situation and meet your needs.