How Is a Testamentary Trust Set Up?

Many different types of trust can be incorporated into your estate plan. But arguably the most straightforward one to include is a testamentary trust. Without any further introduction, please continue reading to learn how to set up a testamentary trust and how an experienced Putnam County trusts attorney at the Law Office of Andres D. Gil, PLLC can help you better understand its legal and cost implications.

How do I set up a testamentary trust?

In short, a testamentary trust is a type of trust contained within your Last Will and Testament document. With this, you may instruct how your appointed trustee is supposed to manage and distribute part or all of your estate’s assets to your named beneficiary. Of note, if you have more than one named beneficiary, you may provide more than one testamentary trust within your single will document.

Further, you must understand that, as the grantor, you do not create a testamentary trust yourself. Rather, it will be established after your death, after your estate’s probate process. As you can see, this is the complete opposite of a living trust, which as the name suggests, is formed during your lifetime.

What are the costs associated with this trust type?

Generally speaking, you may opt for a testamentary trust if your beneficiaries are mostly minor children or adults with disabilities. This is because if you only establish a Last Will and Testament, they may inherit a large sum of money all at once. However, with a testamentary trust included, a responsible trustee may monitor this distribution, according to the timeframe and format you ordered.

With that being said, the New York State Surrogate’s Court may check up on the testamentary trust from the time of your death to its expiration. Essentially, its expiration is when all your estate’s assets are finally distributed, which is established in your provided terms.

So, say that your one beneficiary is your grandchild who is still in the toddler age group. Then, say that you wished for them to inherit your assets when they marry. Well, this may be an extensive timeframe in which the court must be involved. Undoubtedly, legal fees may add up considerably. With a long way away from an expiration date, you may sooner consider establishing a revocable or irrevocable living trust.

On the flip side, though, the initial cost of providing a testamentary trust may be little to nothing at all. This is because you may be simply incorporating this into your will document instead of paying for a separate legal service to prepare a separate estate planning document. Overall, you must weigh these cost considerations and determine which works in the best interests of your beneficiaries.

Before you take any further initiative with your estate plan, we urge you to consult a skilled estate planning attorney in Putnam County. Most definitely, the team at the Law Office of Andres D. Gil, PLLC is eager to work with you.