People often ask us “what is a testamentary trust?” Testamentary trusts are simply trusts that are created in a will. They take effect after someone has died and are designed to help manage an asset.
Why might these be useful? Well, let’s say that someone has minor children who may inherit large financial assets. Testamentary trusts are one method that someone could use to insert some “guardrails” into a child’s inheritance, by establishing rules in the trust that will govern distribution of the asset.
So why does the Slaton Schauer Law Firm, PLLC generally disfavor this method? From our perspective, it’s more efficient (for most people, anyway!) to simply create a living trust than to try to rely on one that is created after you pass away. This can help avoid issues of implementation that may occur after the creator has passed away.