Criminal Defense Lawyers

10 Things You Should Know About A Testamentary Trust

Understanding Testamentary Trusts

A testamentary trust is a type of trust that is created within a person’s last will and testament. It allows the trust creator (also called the grantor or settlor) to put conditions around how their assets will be distributed after they pass away. Testamentary trusts can be useful estate planning tools for managing an inheritance for beneficiaries who may need extra support or protection.

How Testamentary Trusts Work

A testamentary trust springs into existence when the grantor dies and their will is entered into probate. At that point, the terms of the trust will dictate how the trust assets should be managed and distributed to the beneficiaries.The grantor names a trustee to manage the assets in the trust. This could be a friend, family member, professional advisor, or a corporate trustee like a bank or trust company. The trustee has a fiduciary duty to manage the assets in the best interests of the beneficiaries.The grantor also specifies the beneficiaries in the trust – these are the people or organizations that will receive income and/or principal from the trust at some point. Beneficiaries can include spouses, children, grandchildren, charities, etc. The grantor can even name themselves as a beneficiary.The distribution instructions in the trust provide details around when and how beneficiaries will receive the assets. For example, a trust might distribute income to a beneficiary every year for 10 years, and then distribute half the principal when they reach a certain age. The grantor has flexibility to design distribution instructions that suit their wishes.

Key Benefits of Testamentary Trusts

There are several reasons why someone may want to use a testamentary trust as part of their estate plan:

• Control over inheritance: Testamentary trusts allow grantors to place conditions on an inheritance, even after their death. This helps ensure the assets are used responsibly by beneficiaries.
• Protection from creditors/divorce: Trust assets may have better protection from a beneficiary’s creditors or ex-spouses than assets distributed outright. This can provide security for beneficiaries.
• Tax minimization: Trusts can help minimize estate taxes thanks to tax rules that treat trusts differently than outright inheritances. This may allow more wealth to pass tax-free to beneficiaries.
• Support for minors/special needs: Trusts can provide structure to manage an inheritance for a beneficiary who is a minor, has special needs, or may be unable to responsibly manage money on their own.

Common Types of Testamentary Trusts

There are a few common types of testamentary trusts that people often establish as part of their wills:

Minor’s Trust

This is designed to hold and manage assets for minor beneficiaries until they reach the age at which the grantor feels they can handle an outright inheritance. It allows a trustee to make distributions for health, education, and support needs until the beneficiary comes of age.

Lifetime Trust

This allows grantors to provide ongoing income distributions to a surviving spouse or other beneficiary for the rest of their life. It may also allow access to principal under certain circumstances, at the trustee‘s discretion.

Special Needs Trust

This is tailored specifically to provide supplemental needs for a beneficiary with special needs while allowing them to maintain eligibility for certain government benefits. An experienced special needs attorney can help craft appropriate language.

Christine Twomey

2024-03-21

Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.

Brendan huisman

2024-03-18

Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!

Guerline Menard

2024-03-18

Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️

Keisha Parris

2024-03-15

Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.

Taïko Beauty

2024-03-15

I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!

Anthony Williams

2024-03-12

Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.

Loveth Okpedo

2024-03-12

Very professional, very transparent, over all a great experience

Bee L

2024-02-28

Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.

divesh patel

2024-02-24

I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.

Load more

Google rating score: 4.9 of 5, based on 736 reviews

Charitable Trust

This type of trust makes distributions to charities over time, allowing grantors to further support causes they cared about during life. Charitable trusts can also help minimize estate taxes.

How to Set Up a Testamentary Trust

If you decide a testamentary trust could be helpful for your situation, here is an overview of what’s involved:

• Hire an estate planning attorney to draft trust language within your will. Get professional advice to ensure your trust meets all legal requirements in your state.
• Name one or more trustees to manage the trust assets and distributions after you pass away. Choose someone you trust who is responsible and capable.
• Indicate the beneficiaries, distribution instructions, and termination conditions to carry out your wishes. Be as clear as possible about how you want assets distributed.
• Fund the trust by naming certain assets like property, investments, or life insurance to be transferred to the trust upon your death.
• Store the original will in a safe place known to your family/executor and provide copies to trustees/beneficiaries so they can fulfill their duties later on.
• Update the will as needed over time if relationships, assets, or wishes change.

It’s advisable to work with an estate planning lawyer to properly set up a testamentary trust. While it requires some time and expense upfront, it can really pay off by keeping inheritance protected and distributed responsibly to your beneficiaries.

Frequently Asked Questions

**Can you revoke a testamentary trust?**Yes, as long as you are still living and competent, you can make changes to any trusts established in your will or revoke it entirely. Your will only becomes irrevocable upon your death.

When would a testamentary trust terminate?Testamentary trusts usually include termination conditions, such as when a beneficiary reaches a certain age or after a period of years has passed. The grantor defines termination clauses when establishing the trust.

**What happens if no trustees are named in a testamentary trust?**If a testamentary trust has no trustee by the time assets are funding the trust, the court can appoint a trustee to manage the trust. Trustees have legal duties, so it’s better for the grantor to choose trustees in advance.

**Can you challenge a testamentary trust?**Yes, trust beneficiaries can challenge a testamentary trust by filing a lawsuit. It’s not common but might occur if beneficiaries believe the grantor lacked mental capacity when creating the trust or was unduly influenced by another party.

**Who pays taxes on a testamentary trust inheritance?**In most cases, the beneficiaries of the trust pay applicable taxes on any income or distributions they receive from testamentary trust assets each year.

Working With an Estate Planning Attorney

While testamentary trusts can provide substantial benefits as part of an estate plan, they require careful drafting and compliance with your state‘s trust laws and regulations. That’s why it‘s strongly recommended to work with an experienced estate planning attorney if you want to establish a testamentary trust.Here are some tips for finding a qualified estate planning lawyer to assist you:

• Get referrals from financial advisors, accountants, or friends/family who have had positive experiences.

• Check credentials like Juris Doctor (J.D.) and certification in estate planning/trust law.

• Look for membership in estate attorney associations or the National Elder Law Foundation.
• Read reviews online and meet with a few lawyers before deciding.

• Ask questions to understand their experience with testamentary trusts specifically.
• Compare fees charged by different attorneys and firms. Costs will vary.