Summary
A testamentary trust is an estate planning document that may help clients in achieving their estate planning objectives. The primary characteristic of this trust is that it is created through an individual’s will.
• What is a testamentary trust?
• Issues to consider
• How the Edward Jones Trust Company can help
Important: State Laws Vary
It is critical to note that state law varies on how testamentary trusts are executed and interpret. It is important that clients consult with their legal professional prior to executing any estate planning document.
What is a testamentary trust?
A testamentary trust is a trust created through language in the will and will take effect upon the testator’s death and after the will has been probated. The probate agent(s) are responsible for funding the trust during the probate process.
A grantor can appoint an individual or corporate trustee to serve. The Edward Jones Trust Company can serve as either current trustee or successor trustee for your client.
Issues to consider
Depending on the client’s needs, a testamentary trust may be suitable. Although a testamentary trust can provide certain benefits, such as possible estate tax reduction and control over assets after death, it does not address incapacity protection, probate avoidance, or privacy (as addressed in a living revocable trust).
Incapacity protection is not addressed as the will only becomes effective upon the death of the testator. Probate avoidance is not avoided as all property in the will must be probated, and the property is subsequently probated. Privacy is not avoided as wills are a matter of public record.