A testamentary trust is created after someone’s death, based on the instructions contained in the grant0r’s last will and testament. When you create a testamentary trust, the terms are established in advance but the trust does not take legal effect until the grantor dies. It is possible to set up multiple testamentary trusts in a will with one trust for each primary beneficiary. Because like a will, a testamentary trust does not go into effect until after the grantor dies, so the grantor can make changes up until that point, when the trust becomes irrevocable.
A post-death testamentary trust can be set up after someone’s death, provided it is within 3 years. A post-death testamentary trust is limited to benefit your spouse and children.
1. Delay Payment of Assets
A testamentary trust enables the grantor to spread out or delay payment of assets or specify conditions for beneficiaries to receive funds or property.
2. Protect Young Children and Relatives With Disabilities
Testamentary trusts are often created for young children, relatives with disabilities or someone who may inherit a large sum of money that enters the estate upon the testator’s death.
A testamentary trust gives flexibility to the trust’s trustee to distribute assets when they feel is a good time for the estate, the beneficiaries or for tax reasons.
After the grantor’s death, the will goes through the probate process and the testamentary trust goes into effect.
An experienced trusts attorney can discuss the benefits and drawbacks of a testamentary trust for your situation, and help you determine the best way to protect your loved ones and your assets after you are gone.
Do you have questions about testamentary trusts? Our experienced trust estate planning lawyers in Lombard, Illinois can advise you on the best options to protect your assets and loved ones. To talk to a trusts attorney contact the Estate & Probate Legal Group at 630-687-9100.
We provide legal services in Cook, DuPage, Kane, Lake, and Will counties.