Testamentary Trusts

A “testamentary trust” is a trust that is created within the terms of your Last Will and Testament.

Unlike an inter vivos  trust, which is created during one’s lifetime a testamentary trust does not spring into effect until the death of the testator.  As a result, the testator will be able to continue to use and enjoy the assets until his or her death, following which, the assets will be transferred to the Trustee to govern for the benefit of the beneficiaries.   

A testamentary trust will still allow the Testator to govern the manner in which the assets will be distributed to the designated beneficiaries and provide for creditor and matrimonial protection.  In addition to these benefits, a testamentary trust pays tax at a graduated tax rate (same as individuals) rather than the highest marginal tax rate (paid by inter vivos trusts).   For all of these reasons, and more, testamentary trusts have become a common component of the average estate plan. 

To learn more about how a testamentary trust can be utilized in your estate plan to minimize tax, preserve wealth and shield your heirs from creditors and marital breakdown, please give us a call.