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Heritage Law Group July 26, 2019

There is a lot of hype, much of it well-deserved, given to the practice of using trusts in order to avoid probate. When one creates a trust in order to avoid probate, he will usually draft what is called a living trust or, in some circles, an inter vivos trust. This type of trust take effect immediately once the ink dries on the legal documents.

However, some people in San Jose or other parts of the Bay Area may opt for what is called a testamentary trust. As the name implies, a testamentary trust gets created by one's will. In other words, the trust only exists once a person dies and her will gets admitted in to the probate court.

The testamentary trust will not allow an estate to avoid probate altogether. However, the testamentary trust does offer some advantages. For example, it can offer protection from debt collectors and can also in some cases allow an estate to save on its estate taxes.

Another important advantage that a testamentary trust offers is the ability for a person to better control how her beneficiaries will receive, and spend, their inheritances. For example, a testamentary trust can require that an executor only pay a younger beneficiary so much of his inheritance over time instead turning it over in a lump sum when he is inexperienced, or irresponsible, in financial matters.

On the other hand, because a testamentary trust does not go in to effect until after a person dies, she can continue to use her money and property as she pleases without having to worry about conducting business through the trust.

Likewise, if he changes his mind and decides he does not want a trust at all, a simple trip to the attorney's office to revise his will is all that a person will need.

Testamentary trusts can be a good option for a California resident trying to plan her estate. These estate planning devices can be discussed with an attorney who was experience handling wills and trusts.

Related Posts: What is the purpose of a special needs trust?Overview of the elective share in CaliforniaHow does life insurance get handled in an estate?What constitutes undue influence?