Ensure the Wellbeing of Your Loved Ones With a Testamentary Trust

Dive into the essentials of testamentary trusts with this comprehensive guide by the Law Offices of Wenarsky and Goldstein, LLC. Learn how we can protect your legacy and benefit your heirs.

What Is a Testamentary Trust?

A testamentary trust is an important estate planning tool that is created as part of a person’s last will and testament (hence the name). This type of trust is activated only after the testator or will maker’s death and is administered by the designated trustee according to the testator’s instructions in the will.

With a testamentary trust, you can control how your loved ones or family members use your estate assets as against a traditional will that would give your heirs full control of their inheritance. 

However, creating an effective testamentary trust requires a deep understanding of the legal principles and statutory provisions that govern such documents. That’s where we come in.

At the Law Offices of Wenarsky and Goldstein, LLC, we help families and individuals create comprehensive estate plans, wills, and trusts that ensure their wishes for their estate and loved ones are followed in their lifetime and after death.

We understand that the decision to create a testamentary trust is born out of concern for the future of your loved ones. With our extensive experience, you can trust us to help create a trust that aligns with your objectives and complies with the relevant laws to give you peace of mind.

Please read on to learn more about testamentary trusts in New Jersey and specific ways we can help.

Characteristics of Testamentary Trusts

A testamentary trust is the direct opposite of a living trust (also called inter vivos trust) that is activated during the trust maker’s (settlor) lifetime. 

Living trusts may also be revocable or irrevocable depending on the settlors’ wishes. But by its nature, a testamentary trust can only be irrevocable since the creator has passed on. 

However, unlike irrevocable/ revocable living trusts, a testamentary trust cannot be used to avoid probate. Probate is the legal process by which a deceased person’s will is validated and authenticated. Probate is required when a person dies leaving a will, unless in a few exceptional cases. 

A testamentary trust gets its life from the will creating it, so until the will is admitted to probate by the probate court, the testamentary trust remains inactive. If the will does not fulfill the legal requirements and is not admitted to probate, then the testamentary trust dies. 

The relationship between testamentary trusts and the probate process is often considered a disadvantage because of the complexities of the probate process. However, testamentary trusts offer several other benefits, some of which shall be discussed in the next section.

Benefits of a Testamentary Trust

A testamentary trust can be an effective estate planning solution, depending on your circumstances and concerns.

This type of trust offers several benefits not necessarily for you but for your loved ones (the beneficiaries), including the following;

Asset Protection for Vulnerable Beneficiaries: A testamentary trust allows you to control how your assets are distributed to your vulnerable beneficiaries, such as minors or adults who have trouble managing their finances for any reason.

By placing these assets in a trust, you can specify the timings and conditions under which your beneficiaries will receive their inheritance, such as reaching a certain age or achieving a milestone. You can also schedule income payments from your estate to help your loved ones live comfortably for a long time without giving them outright control.

Exemption From Income Taxes: The income from a testamentary trust is not taxable as income, so your beneficiaries can receive their inheritance from the trust without any income tax liability.

Despite these benefits, you might still be unsure whether a testamentary trust is right for you, perhaps due to the availability of multiple kinds of trusts. If you have such concerns, our experienced estate planning attorneys can assess your case and provide the necessary legal guidance to help you make an informed decision.

Creating a Testamentary Trust

The first step to creating an effective testamentary trust is to create a valid will.

A New Jersey will  must be

  • written
  • Signed by the testator or signed by someone else on the testator’s behalf under their direction
  • Signed by at least two witnesses.

A will that does not meet these requirements may be invalidated during the probate process.

Drafting the Terms of the Trust

You have the power to determine the terms of your testamentary trust and how it will be administered. It is important that you express your intention to create the trust and its governing terms in clear language. That way, there will be no confusion or doubt about your wishes.

You may need to seek help from an experienced estate planning attorney who can help ensure that the text of your will and testamentary trust document aligns with your goals.

Identifying the Trust Assets and Beneficiaries

Your testamentary trust must specify the assets that would be used to fund the trust. You must also name the beneficiaries and specify who gets what from the trust assets.

Choosing Your Testamentary Trustee

The trustee of a trust plays a fundamental role in the trust administration process. Therefore, selecting the right trustee is paramount,

 In our firm’s experience, the right trustee should ideally have:

  • A solid understanding of fiduciary duties.
  • The capacity to manage and distribute assets according to the trust’s conditions.

For your peace of mind, the trustee should also be someone you can trust to execute your wishes steadfastly in your absence. This could be an individual or a trust company. 

Sometimes, choosing a testamentary trustee could be difficult when there are multiple candidates. We can help you weigh your options to ensure your estate planning goals are met even in your absence.

Creating Your Testamentary Trust With the Law Offices of Wenarsky and Goldstein, LLC

At the Law Offices of Wenarsky and Goldstein, LLC, we understand the powerful role a testamentary trust can play as you plan your estate. We can guide you through the trust creation steps and the legal requirements to help you create a solid trust document that would stand up to legal scrutiny. 

In overseeing the creation of testamentary trusts, we prioritize our client’s wishes while crafting personalized solutions for each unique situation. 

Our experience with guardianship, estates, and probate matters informs our compassionate and intelligent approach to exceeding your expectations and positioning your beneficiaries thoughtfully for the future. 

We’d be glad to assist you as you work to settle your affairs for your peace of mind and the benefit of your loved ones.

Contact Us Today

A testamentary trust is incorporated within your last will and testament and is activated upon your passing. It is an effective tool that allows you to control how your assets are distributed to your chosen beneficiaries instead of granting them outright ownership.

Testamentary trusts must comply with certain legal requirements to be valid. Our attorneys are well-versed in navigating those legal requirements. They can help you create a testamentary trust that integrates seamlessly with your overall estate plan, ensuring your legacy is managed as per your directives.

If you have further questions about New Jersey testamentary trusts, reach out to us for thorough legal guidance. Your legacy is paramount and deserves the utmost attention; we are here to deliver exactly that.

Call the Law Office of Wenarsky & Goldstein

At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.