What is a Testamentary Trust?
The testamentary trust is a type of trust that arises out of your last will and testament – thus, the reason for the name – and it doesn’t take effect until you die.
What is the Purpose of a Testamentary Trust?
Usually, a testamentary trust is created with the purpose of benefiting a minor child. Since a minor child cannot receive major gifts, such as a house or the bulk of an estate, the testamentary trust allows the decedent to leave the property to a trustee who then looks after it for the benefit of child.
How are the Terms of a Testamentary Trust Changed?
If you want to change the terms in your Will, you can’t just scratch out the undesirable terms and replace them with the new ones; there are procedures that must be followed, and formalities that must be observed. Since a testamentary trust is written into your will, the same procedures and formalities must be observed in order to change one of its terms. If these procedures and formalities are not observed then the will may not be admitted to probate, which means that the testamentary trust will fail.
What are the Basic Formalities Required?
The basic formalities required for creating a validly attested will and, therefore, a testamentary trust are threefold. First, the will must be in writing. Second, the will must be signed by the settlor/testator. Third, this must be attested to by witnesses.
If you have further questions, contact your local estate planning attorney.