Even if a person does not have a large amount of assets, a proper estate plan is beneficial. This plan allows an individual to denote the specific allocation of all assets, as well as specify any funeral or burial requests. Such information can be very helpful during the emotional time following his or her death.
A testamentary trust is an important part of a will that aids in the estate distribution process. There are a few key things to know about this type of trust.
In short, a testamentary trust is a part of the last will and testament. Within the will, the person writing it designates how to divide the estate. This includes all aspects of an estate, including any life insurance policies. A testamentary trust is usually advisable for smaller estates. For those with large or complicated estates, additional documentation may be necessary.
Individuals usually create testamentary trusts for disabled individuals or young children. The person creating the will, or settlor, puts the trust in the will and provides the stipulations for proper distribution of all assets. This includes who the assets will go to, or beneficiaries, and who must administer the distributions, or the trustee. A testamentary trust usually has an expiration date, which the settlor also selects. This may be a specific date or a select time period, such as once a child graduates from college or gets married.
Chapter 36c of the North Carolina General Statutes clearly denotes all aspects of the Uniform Trust Code, which includes testamentary trusts and their distribution. Though most estates must go through a probate process and the courts do monitor it through the life of the trust, a trustee is still responsible for the daily administration. Therefore, it is important for individuals to select trustee who they find to be trustworthy.
These are just a few key facts about testamentary trusts. Before determining the best choices for an estate plan, people should take some time to review all the trust entails to aid in the decision.