Testamentary Trusts

A testamentary trust is created after the grantor passes away and is established according to the instructions contained in their last will and testament.

In an uncertain world, it’s never too early to start securing your legacy. You can make a plan to protect your family’s financial future by contacting one of our experienced estate planning attorneys. Schedule a consultation here

Here’s the reality: Even if you’re wealthy, your passing may leave your family in a precarious financial situation if you fail to make an estate plan. 

a Testamentary Trust

Without a plan in place, your assets may be subject to penalties and taxes, or they may be held up in expensive, drawn-out court proceedings. And all the funds you worked so hard to save for your loved ones could be in jeopardy. Luckily, that’s not how it has to play out. 

When you work with an estate planning expert, you’ll have access to numerous legal strategies that can help you secure your legacy. One of the most common estate planning tools is the testamentary trust, but it’s not for everyone. 

Are you ready to ensure your family’s financial benefits to the fullest extent? The best way to do so is by consulting with an experienced testamentary trusts attorney. Keep reading to learn everything you need to know about testamentary trusts, how they work and whether they’re a good option for you. 

At Medley Law Firm, nothing is more important to us than giving our clients the peace of mind that comes with expert financial planning. If you’re interested in exploring our asset protection strategies, give us a call at (850) 607-7890 to schedule a case evaluation. 

What Is a Testamentary Trust? 

Unlike a living trust, a testamentary trust is one that is created after the grantor passes away and is established according to the instructions contained in their last will and testament. The will also names a trustee—the person who is to manage the trust’s assets on behalf of its beneficiaries. 

Essentially, a testamentary trust is a tool that allows the decedent (person who has died) to communicate their wishes for their estate. An effective wealth management strategy, these trusts have many advantages, but they’re not ideal for everyone. 

Advantages of a Testamentary Trust

When it comes to estate planning tools, there’s no one-size-fits-all approach. The strategy that you and your lawyer decide on will depend on your specific needs. That being said, here are some of the scenarios in which establishing a testamentary trust may be advantageous:

  • You have young children. These trusts are helpful when a parent has young children and wants their assets distributed to them responsibly if they pass away prematurely. A parent can establish instructions in their will for how and when (such as at certain milestones), their funds should be distributed. 
  • You want to make modifications. Because a testamentary trust does not go into effect until its grantor has passed away, it can be modified at any time. 
  • You have limited assets. When parents of young children don’t have substantial assets, they might not be able to afford to establish a living trust. Creating a testamentary trust within their will offers a relatively affordable solution. 

Although it still costs money to create a will, the cost of creating a testamentary trust comes out of the decedent’s estate, meaning there’s no upfront cost. If later in life a person can afford to create a trust, they only need to remove the testamentary trust from their will and establish a living trust in its place. 

Disadvantages of a Testamentary Trust

There are, of course, downsides to creating a testamentary trust, but again—it’s dependent on your specific situation. Here are some of the potential disadvantages:

  • Probate. Unlike certain types of trusts, a testamentary trust does not avoid probate (the legal process in which the court distributes assets). That means a person must go to court with the decedent’s will and testament and other documents in order to prove they’re authorized to distribute assets and establish the trust. 
  • Lengthy process. Without going through probate, assets can’t be moved into the beneficiary’s name. Unfortunately, the probate process can take several months to complete, which means the decedent’s beneficiaries don’t receive funds right away. 
  • Public record. When a testamentary trust goes through probate, it becomes public record, and the beneficiaries of the trust do as well. 
  • Ambiguity. If the decedent’s will is confusing or lacking in clarity, the testamentary trust may not be established or executed properly. 

For these reasons, some people prefer the precision of a living trust. However, money does present a barrier to entry. 

Medley Law Firm: Testamentary Trusts Attorney

Testamentary trusts, like any other estate planning tool, can be complex. If you’re interested in creating one, it’s in your best interest to work with an experienced legal professional who knows the ins-and-outs of trust creation and execution, as well as their drawbacks and benefits. 

As top testamentary trusts attorneys in Florida, we understand that it can be unsettling to create financial plans for after you’ve passed. Here’s our promise to you: We’ll treat your legacy with the same care and precision with which we’d treat our own. We’ll help you explore your options and pick the best approach for your financial needs. 

Remember: It’s never too early to secure your family’s financial future, so don’t delay. Getting started is as simple as contacting us online to schedule a consultation or giving us a call at (850) 607-7890. 

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Medley Law Firm is an Elder Law, Estate Planning and Probate firm in Pensacola, Florida that offers in-person professional services from Pensacola to Panama City and virtually across the entire state.

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