E.A. Goodman Law, LLC advises clients throughout New Jersey on wills and trusts, including testamentary trusts. If you have concerns about providing for your minor children, caring for a disabled loved one, or the manner in which a beneficiary receives an inheritance, creating a testamentary trust may be a good option.
When you meet with us, we will take the time to understand your circumstances and help you develop an estate plan that achieves your objectives. Testamentary trusts are a useful tool to consider due to their flexibility and benefits. Contact us today to learn more about this invaluable estate planning tool.
What is a Testamentary Trust?
A testamentary trust is a legal arrangement created through a will, specifying how your assets will be managed and distributed. Unlike other trusts, testamentary trusts only take effect when the person who created the trust passes away. Once it is activated, a trustee, appointed by the deceased, manages the trust assets for the benefit of the beneficiaries.
These trusts offer a combination of customization and control, allowing you to determine how your assets are distributed while protecting your loved ones’ interests. You can tailor the trust to your unique needs, whether providing for minors, caring for a disabled family member, or simply ensuring that your hard-earned assets are responsibly managed.
Why Do I Need a Testamentary Trust?
While a will is an essential component of your estate plan, a testamentary trust can better protect and manage assets for your beneficiaries. Reasons to create a testamentary trust include:
Protecting Minor Beneficiaries
A testamentary trust can ensure that minors receive their inheritance in a controlled and responsible manner. The trustee can manage the assets on their behalf until they reach a specified age or meet certain conditions, such as learning a trade or graduating from college.
Caring for Disabled Family Members
If you have a disabled family member, a testamentary trust can provide for their long-term care and financial support, without jeopardizing their eligibility for government benefits, such as Medicaid or Social Security Disability.
Preserving Your Wealth
A testamentary trust can protect your assets from the financial missteps of your beneficiaries and creditors’ claims, ensuring your wealth is preserved for future generations.
Importantly, a testamentary trust that spells out your wishes can minimize disputes among family members and ensure your assets are distributed as you intended.
Pros and Cons of Testamentary Trusts
Like any estate planning tool, testamentary trusts come with pros and cons. Advantages include:
- Flexibility – You can customize the trust to suit your unique needs and circumstances and control asset distribution and management.
- Asset protection – By placing your assets in a testamentary trust, you can protect your beneficiaries from creditors, divorcing spouses, and poor financial decisions.
- Lower taxes – Testamentary trusts offer potential tax advantages, such as income splitting among beneficiaries, resulting in lower overall tax liability.
Despite these advantages, there are disadvantages. First, creating a testamentary trust may result in greater administrative costs for your estate than a simple a will. Also, testamentary trusts are subject to probate, which leads to more involvement and oversight from the probate court. By working with our capable New Jersey trusts and estates attorney, you can make informed decisions about your planning needs.
How E.A. Goodman Law Can Help
When you work with us, we will help you navigate the complexities of wills, trusts, and testamentary trusts. By understanding your unique financial situation and family dynamics, we can help you create a testamentary trust that best suits your needs and objectives and adheres to applicable legal requirements.
Knowing that appointing a competent and reliable trustee is crucial for protecting your assets, we can offer informed guidance on selecting a suitable trustee by considering that individual’s ability to carry out their duties and honor your intentions.
Because testamentary trusts carry tax implications for the beneficiaries, we will help to structure the trust in the most tax-efficient manner possible. Moreover, creating a will is not a once-and-done arrangement, so we can help you review and modify your estate plan to ensure it aligns with life’s transitions.
Finally, after your passing, we can assist the trustee and beneficiaries by helping them navigate the probate process, advising on trust administration, and resolving any disputes that may arise. Above all, we will provide you and your family with compassion, knowledge, and caring personal service every step of the way.
Talk To An Experienced New Jersey Testamentary Trusts Attorney Today!
Creating a testamentary trust is an effective way to protect your assets and provide for your loved ones. Contact our office today to schedule a consultation.