In our last publication, we discussed Living Trust as a tool for Estate
Planning, which addresses the concerns of people who intend to ‘put their
houses in order’ in the event that any of life’s occurrences play out. Another
option or tool which can be considered is a Testamentary Trust.
What is a Testamentary Trust?
Testamentary trusts are express trusts created under a Will by the
Settlor/Testator.
A Settlor/Testator is the person who establishes a Trust/Will and legally transfers
control of his/her assets to a trustee, who manages it for one or more
beneficiaries.
Under a Testamentary Trust, the trust does not come into force until after the
settlor’s demise. However, changes to the trust can only occur during the
lifetime of the settlor.
A trustee is appointed and named in the Will and, once the process of
administration on death has been completed, the executors of the Will transfer
the property of the deceased person (settlor) to the trustee(s) and the
testamentary trust then comes into force.
The beauty of a Testamentary Trust is that it ensures that the testator’s
legacy can endure in future generations as instructions can be given to the
Trustee to make payments not only to existing beneficiaries but even to
grandchildren and beyond, depending on the size and circumstances of the
Estate.
Other advantages of a Testamentary Trust include:
- Protection of assets from creditors.
- Safe guarding the rights of beneficiaries, such as minors who are unable to manage their finances, beneficiaries with special needs or those who have other challenges.
- Shielding the assets from family law disputes.
It
must be stated that a Testamentary Trust will require a grant of Probate to
take effect, thus, we can work with you to ease the process through leverage on
our partnerships, while providing advice on the best options for you. Please
send us an email at trustees@meristemng.com or call +234
802-337-1880 to speak to an Advisor.
We look forward to hearing from you!