Consulting with professionals in your circle, such as a CPA, financial advisor, and estate planning attorney can help you to understand the most important issues facing your future and how to use estate planning tools and strategies to accomplish individual goals. You may have heard the term testamentary trust in the context of estate planning before, but it can also go by other names, such as a will trust or a trust under a will.
A testamentary trust determines what happens to a person’s estate and how it gets transferred into a trust when the individual who created that trust passes away. In order to create a testamentary trust, you need to work with an estate planning attorney to ensure accuracy. The terms of a testamentary trust are specified in a creator’s will.
The testamentary trust is only activated after the creator of the trust passes away. The trust becomes irrevocable at the time the original creator passes away but can be updated by the creator until that point. After the will goes through probate, a testamentary trust is officially created, and assets are not transferred outside of probate by the trust since the grantor owns those assets individually at the time of their death. Both a separate trust and a family trust can be created through a testamentary trust.
It is valuable to work with an estate planning attorney to discuss the pros and cons of various approaches. If you think a testamentary trust may work well for your individual goals, schedule a time to meet with Pasadena estate planning lawyers to talk through your next steps.