Hello
I would like to learn all I can about setting up a Testamentary Trust - (Corpus?)
Can you help please?
Dear regino-ga;
Thank you for allowing me to answer your interesting question. Unlike
a ?living trust? (sometimes referred to as sometimes called an ?inter
vivos trust?) that is created by the trustor during his or her
lifetime, a testamentary trust is a trust created by the trustor's
will. If it is funded and set up carefully there are ways in which a
living trust can avoid probate, but property bound by a testamentary
trust cannot avoid the legal probate process because this is the
nature of the distribution. Why? Because Testamentary Trust provisions
are often designed primarily to keep significant (or significantly
valuable) assets like large sums of money from being distributed to
minor children in the event that both parents die. For example, a Will
with a Trust may provide that assets go to a surviving spouse but if
no surviving spouse exists then the assets will go to a designated
Trustee on behalf of the minor children?s interest to be held for
those children until they reach a certain age (usually, but not
necessarily, until they reach legal adulthood according to local state
laws). Since trust laws mandate that a designated Trustee be subject
to the supervision of Probate Court for the duration of the Trust it
is only logical that Testamentary Trusts are subject to Probate.
Obviously, since the testamentary trust is established in a Will the
trust does not take affect until the grantor dies. At the time of the
grantor?s death a legal relationship is established between the
decedent (testator or settlor) of the trust, the trustee (sometimes
the executor of the will) and the beneficiaries of the trust (intended
recipients specifically named in the testamentary trust, be they
family, friends, charities, etc.).
Some of the primary direct benefits of a testamentary trust are:
-- Most notably a testamentary trust guarantees professional
management of assets until one?s children (or even adults perhaps) are
able to manage their inheritance (or it allows the Trustee or Trustees
to use the trust property for the benefit of the beneficiaries most in
need until the time of final division or final distribution of the
estate trust property.)
-- Minimal costs during the grantor's lifetime (it usually only the
cost of naming the trust's terms in a Will)
-- The guaranteed preservation of property and assets within one's family
-- Opportunities to certain potential estate tax savings (for example,
this type of trust creates two taxpayers, the surviving spouse and the
Testamentary Trust. With two taxpayers, using graduated marginal rates
because it is a Testamentary Trust, usually means less income tax is
payable, thus a potentially significant savings).
-- And some flexibility in carrying out one?s wishes
Here you will an amazingly informative article about testamentary
trusts. It?s quite simple really. A testamentary trust is an excellent
option in my opinion, and yet a very simplified means of providing for
charities or family members, especially minor children or young adults
who are not yet ready to manage their own financial affairs, on your
own specific terms and without sticking them with the entirety of the
tax burden. Pay special attention to the potential tax ramifications,
the various types of testamentary trusts as well as the recommended
considerations:
PROFESSIONAL REFERRALS
http://www.professionalreferrals.ca/article-863.html
Here is a very simply drafted sample testamentary trust for you to examine:
MEDLAW PLUS
http://www.medlawplus.com/legalforms/instruct/sample-trust.pdf
I hope you find that my answer exceeds your expectations. If you have
any questions about my research please post a clarification request
prior to rating the answer. Otherwise I welcome your rating and your
final comments and I look forward to working with you again in the
near future. Thank you for bringing your question to us.
Best regards;
Tutuzdad-ga ? Google Answers Researcher
INFORMATION SOURCES
UNCLES FED?S TAX BOARD
Testamentary Trusts
http://www.unclefed.com/AuthorsRow/Newland/testamentarytrusts.html
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Setting up a Testamentary Trust