You can spend your entire life building an estate. Naturally, you may find yourself wondering what might happen to the wealth you have built and who should inherit it once you’ve passed away.
Creating a testamentary trust is an easy way to give yourself peace of mind and ensure that your estate and your loved ones will be cared for.
What is a Testamentary Trust?
So, what exactly is a testamentary trust? Testamentary trusts are usually detailed in a person’s will. (If you would like to learn more about wills, check out our blog post from “Make a Will Week”).
Unlike living trusts, testamentary trusts only take effect after someone has passed away.
Creating a testamentary trust is a simple process if you get the help of an experienced lawyer who understands British Columbia law like our estate planning law specialists here at Doak Shirreff.
Creating a testamentary trust involves three entities; the will-maker (who is also known as the settlor), the trustee(s) and the beneficiary(ies). The will-maker creates the testamentary trust through his or her will, the trustee manages the property held in trust for the beneficiary upon the will-makers death, and the beneficiary receives the benefits of the property held in trust. If you are creating a testamentary trust, you can choose whomever you feel you can trust to be your trustee, and this person can be the same person, or a different person, than the executor named in your will. Hence the word “trust”.
Beneficiaries could be your spouse, children or anyone else you would like to give your estate to. Your testamentary trust will go into your will and takes effect when you pass away. You can even make multiple testamentary trusts in your will if you wish.
Why You Should Be Aware of Testamentary Trusts
Building an estate can take a lifetime. Making sure you know what will happen to your estate and loved ones after you’re gone can bring peace of mind. Likely, you’ll want to make sure that your estate goes to who you would like when you feel they will be able to handle it. A testamentary trust is a useful tool to control the timing of a gift in your will. For instance, some testamentary trusts are designed to keep control over assets until the beneficiaries are over 19 years old to make sure they are able to well manage it. If you have an intended beneficiary with a disability it is very important to use a testamentary trust so that your trustee can manage the beneficiary’s assets for them long term.
Protect Your Family’s Future with a Testamentary Trust
Making a testamentary trust could give you confidence in knowing that your estate and family are protected if anything should happen to you. A testamentary trust may also protect the assets in the trust from creditors if any of your beneficiaries are at risk for bankruptcy or marital dissolution. This is because the assets are not their individual property, but rather belong to the trust. It also enables you to distribute your estate to a beneficiary over a period of time if you see fit.
If you think setting up a testamentary trust could be the right thing for you, contact our team of friendly and experienced lawyers at Doak Shirreff. We have teams who specialize in estate planning law who would be more than happy to answer any questions you may have.
Contact us at Doak Shirreff today.