Don't Get Short Changed on the Terms of your Testamentary Trust

A testamentary trust is simply a trust created under a Will.  Traditionally such a trust has been a fixed trust so that a certain sum or proportion of the deceased’s estate is held on trust for the beneficiary.

In the last few years estate planners have been using testamentary discretionary trusts which give the trustee a discretion as to how much a beneficiary may receive from the estate and when. 

These trusts are very useful to protect the beneficiary’s inheritance from creditors or estranged spouses or to meet the beneficiary’s particular needs if they have particular vulnerability such as substance abuse issues.  They also allow child beneficiaries to get the benefit of the full adult marginal tax rate.

There’s a lot to think about when preparing a discretionary trust and it is curious to note that some practitioners are using a shorthand version of a discretionary trust’s rules when creating such a trust in a Will.  Don’t get short changed if you are arranging a testamentary discretionary trust. 

If it’s good enough for a normal discretionary trust to set out in detail all the possible issues that good governance requires, then it is certainly good enough for those same provisions to be included in a testamentary discretionary trust. Let TOWNSENDS BUSINESS & CORPORATE LAWYERS provide you with a testamentary discretionary trust that you can rely on to allow the trust the full range of power and flexibility it needs.