What Are Testamentary Trusts? Do You Need One?
A Testamentary Trust goes into effect after a death and is often created as part of a Will.
Since your Will must be admitted to Probate before your assets can be distributed to your beneficiaries, any Trusts created in the Will must also be admitted to Probate. This means that, unlike Living Trusts, Testamentary Trusts may take some time before they become effective.
Making Changes To A Testamentary Trust
Testamentary Trusts can be complicated to amend. Because they are created within a Will, any revisions you make to the Trust also requires revising the Will.
Privacy Of Testamentary Trusts
Many people create Trusts to conceal certain property. With Testamentary Trusts, however, there is no privacy. This is because they are created as parts of Wills, and since Wills are public documents any Trusts created within a Will are also public. If you are interested in creating a Trust to create some privacy around your assets, you will probably want to set up a Living Trust.
Testamentary Trust Cost
Testamentary Trusts can be fairly affordable to create since they’re part of a Will, meaning that there’s no additional paperwork in setting it up. This is unlike a Living Trust, which must be created as a separate legal document.
Revocable vs. Irrevocable
Testamentary Trusts are Revocable while you're alive and become Irrevocable after you die. This is because while you are alive you are the Trustee and can make any changes you'd like. But once you're dead you're no longer the Trustee and are unable to make changes.
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