What is a Testamentary Trust?
A Testamentary Trust is in essence a trust which is "funded" through a Will. Imagine someone with minor children planning for the event that the children might be left without parents. The person writing the will knows that they cannot own any assets. If both parents of a child die unexpectedly, how can the parent's assets such as house, cars, investments, and possibly large insurance proceeds be used to provide for the children?
This is where Testamentary Trusts come in. A will can be written in such a way that either all or only certain assets will go into a trust when the will-writer dies. If the child is a minor, a guardianship will have to be established by the court unless the Will already appointed a Guardian. But what about an 18-year-old child who is not emotionally ready to be in charge of several hundred thousand dollars? What if an even older child has issues with substance abuse, or has mental handicaps?
The trust can contain various conditions, such as providing payouts at certain stations in life, or to fund education, to fund health care services, etc. It can be written so that all assets are turned over to the child once a certain age is reached, or that income is provided indefinitely without the assets ever being turned over to the child.
When you decide to create a testatmentary trust it is most important to select a trustee who knows your wishes, and who has the professional background, the necessary skills to manage your trust according to your instructions and wishes.
When you choose Kurt Tittelbach as Trustee, we will make every effort to know your wishes. To truly serve your insterests we need to be aware of changes in your life. Regarless of who the trustee is - family friend or professional fiduciary - the trustee will be subject to Probate Court supervision for the duration of the Trust.
Choosing wisely and evaluating the skills and qualifications of your trustee could have a major impact on the expenses and general success of trust administration. Mistakes made by a trustee can result in legal challenges and be very costly.
If you already have a trust, or setting up a first time trust and looking for an experienced trustee, please give us a call for a no-obligation consultation.
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