What is a testamentary trust?
A testamentary trust is a trust created by a will that takes effect when the settlor( the person who made the will) dies. This is pursuant to Florida State Statute 736.1106. The settlor of the will provides the directions for establishing the trust at the time the will is created. Although the will is in existence immediately upon execution thereof, the trust is not actually created until the settlor has died and the estate has passed through probate.
What is the difference between a living trust and a testamentary trust?
A living trust (also known as an inter vivos trust) transfers ownership of property or other assets from a person(s) to the trust itself. A living trust starts during a person’s lifetime, immediately removing ownership from the individual so long as the trust was executed and funded properly.
A testamentary trust is included in a Last Will and Testament but does not come into existence until after the grantor’s death. Ownership of any assets devoted to the trust may remain within the legal possession of the grantor throughout their life.
The property or assets dedicated to the trust transfer into the trust after the estate has cleared probate.
You should seek advice from an estate planning attorney if you have a will but aren’t sure about a testamentary trust. This can provide an enormous amount of protection to your assets and your heirs’ future interest.
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