There are many types of trusts that you can set up with an estate plan, but it can be tough to choose which kind of arrangement works best for your assets and beneficiaries. Fortunately, a Des Moines trusts lawyer from our firm can help you weigh your options and figure out if something like a testamentary trust can be a good fit.
How Do You Establish a Testamentary Trust?
A testamentary trust is established through your will. You set its terms, select a trustee, and pick your beneficiaries. Then this trust is established once you pass away. You can edit your will and change your testamentary trust at any time.
How Does a Testamentary Trust Work?
When you establish a testamentary trust, you can set rules about how the money is distributed to your beneficiaries. Your trustee follows your instructions to the best of their ability and can help ensure that the funds are not wasted, especially if the beneficiaries are minors.
This kind of trust can also be used to donate to charity. The funds inside can be donated to one or more causes over time. Just leave behind instructions for how you want your assets to be used.
When Is This Kind of Trust a Good Fit?
A testamentary trust can be an especially good fit for anyone with minor children. You can set up one so that a trustee distributes the money to your kids until they reach a certain age. Once they have gotten old enough, you can make it so the trust gives any remaining funds to your beneficiaries.
Because a testamentary trust is established as a part of your will, you don’t have to spend money upfront in order to make one. If you wanted to use a living trust, for example, you would have to pay to set it up while you were still alive. When you choose a testamentary trust instead, the cost of establishing it is taken out of your estate.
One potential drawback of this type of arrangement is that your assets will still have to go through probate. This means two things. One, beneficiaries will likely have to wait weeks or months for the probate process to complete before they can start accessing their inheritance. Two, the contents of your trust are going to be public record.
Do I Need a Lawyer to Set Up a Trust?
We recommend talking to a lawyer when you want to establish a trust. Our experienced lawyers can help you weigh all of your options and make the most out of any estate planning tools that are available to you.
Contact Our Law Firm Today
When you are ready to learn more about your estate planning options, contact Herting Law, PLLC. We can schedule a consultation and teach you more about your options and how you can best safeguard your assets for future generations.
