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What Are Testamentary Trusts?
Testamentary trusts are trusts that are specified in a person’s last will document. They generally take effect upon the death of the testator, or according to the instructions specified by the testator. Basically, the trust is created through terms and provisions in the person’s will.
In a testamentary trust, the person will name the property to be placed in the trust, the trustee who will manage the trust fund or account, and the beneficiary (the recipient of the trust property). The trustee may be a different person from the executor, which is the person who is charged with managing the overall estate after the testator has become deceased.
Testamentary trusts are sometimes known as “will trusts”, due to the fact that they are enacted through the will document.
Why Are Testamentary Trusts Used?
In some cases, the testator may not want to grant their property or funds directly to a beneficiary during their lifetime, or even immediately after their death. Instead, they may use a testamentary trust to create an account that may be subject to certain conditions.
For instance, suppose that the testator has as large amount of money or a very valuable piece of property that they wish to leave with a minor child or relative after they pass away. They may create a testamentary trust which will hold the property for the child, subject to certain conditions. For example, the child might not be able to access the account until they reach the age of majority, or until they graduate from high school.
These types of instructions can be tailored according to the wishes of the testator. This makes testamentary trusts a very flexible and useful tool for managing property. Also, a testamentary trust can help avoid the probate process, which can often result in inconsistent distribution of the property.
What If the Trustee Violates Their Legal Duties?
The trustee named in the testamentary trust is appointed to be a neutral, uninterested administrator of the trust. They have legal duty to periodically check up on the trust and to ensure that it is in good legal standing. They aren’t allowed to access the trust for personal reasons, and can’t mix their own assets with the trust assets. In some cases, they may have a duty to invest the trust money in a reasonable and prudent manner so that the account grows.
Violations of any of these duties can result in a civil lawsuit against the trustee. The trustee would then need to make reimbursements for any losses resulting from their misconduct. In most cases, the beneficiary would receive the monetary damages, or the damages award might go to the deceased person’s estate.
Do I Need a Lawyer for Help with a Testamentary Trust?
Testamentary trusts can often be subject to some rigid, formal legal requirements. You may wish to hire a qualified trusts lawyer for help with drafting or editing a testamentary trust. Your attorney will be able to assist you with the necessary paperwork to make sure that your property will be distributed the way you want it to be. Also, if there are any legal disputes or if you need to file a lawsuit, your attorney can provide you with professional legal representation in a court of law.
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Last Modified: 03-09-2015 04:17 PM PDT
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