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The How to for Testamentary Trusts

The following copy is for our SAPEPAA Members to send to their clients on the How to of Testamentary Trusts


  1. Determine your estate planning goals and objectives. Before creating a testamentary trust, it's important to understand your goals and objectives for your estate plan. This can help you determine whether a testamentary trust is the right tool for you.

  2. Choose a trustee. A testamentary trust is created through a will and takes effect after the person creating the trust (the testator) passes away. The trustee is responsible for managing and distributing the trust assets according to the terms of the trust. It's important to choose a trustworthy and capable individual to serve as the trustee of your testamentary trust.

  3. Decide on the terms of the trust. The terms of a testamentary trust can be customised to suit your specific needs and goals. This can include decisions about how and when the trust assets will be distributed, who the beneficiaries of the trust will be, and any specific instructions or restrictions for the trustee.

  4. Create a will and include the testamentary trust provisions. A testamentary trust is created through a will, so it's important to create a will and include the provisions for the trust. Make sure to work with an Abbott & Mourly Lawyer to ensure that the trust provisions are properly drafted and that the will is legally valid.

  5. Fund the trust. After the testator passes away and the will is probated, the trustee will be responsible for transferring the assets specified in the trust into the trust. This can include things like real estate, investments, and other assets.

  6. Administer the trust. The trustee is responsible for administering the trust according to the terms of the trust agreement. This can include managing and investing the trust assets, distributing assets to the beneficiaries, and keeping accurate records of trust activity.

  7. Terminate the trust. A testamentary trust can be set to terminate at a specific date or event, such as when the beneficiaries reach a certain age. The trustee will be responsible for distributing the remaining trust assets to the beneficiaries and closing the trust once it has been terminated.

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Good stuff......worthy of selective use in educating clients. It's always difficult to know how much detail to include in such docs....for an unknown audience. But for those wishing to offer deeper insight, may I respectfully suggest extending the doc to mention a) scope and merit of appointing a corporate trustee for the TT......especially if the TT is intended to extend over multiple generations....b) also the scope for settling the TT in SA to enable perpetuation beyond 80 years c) I'm thinking that this doc stops short of saying that the terms of the TT are set out in the will, but that those terms can be made more specific when the deed is actually settled post-probate....

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