Learn about the strengths and weaknesses of Testamentary Trusts compared to other estate planning tools.
A Testamentary Trust is a type of Irrevocable Trust created upon your death. The terms of the trust and instructions for its creation would be contained in your Will. Unlike many other forms of Trusts, a Testamentary Trust is formed during the Probate process. Thus, any assets involved are subject to Probate exposure.
Testamentary Trusts are most frequently used when the testator/settlor wants to provide benefits for a minor or other dependent. There are other ways of accomplishing this objective, however some can be more involved. Testamentary trusts are relatively simple to create. Unfortunately, as a trade-off they offer fewer benefits. For example, Testamentary Trusts offer less control and lack probate protection (when compared to a Revocable Living Trust).
There are many options when designing an estate plan with your attorney. A Testamentary Trust can be the right fit depending on your goals and preferences.
Time of creation: upon your death.
Probate avoidance: no.
Control of assets: limited.
Cost: less expensive, but not substantially.
Most appealing feature: simplicity, cost.