Wills and Testamentary Trusts
Updated: Apr 13, 2021
A Will provides a mechanism for you to make the decisions regarding the administration of your estate and the timing and terms of distribution of assets. In the absence of a Will, such decisions would be made by the state pursuant to the laws of intestate succession or a court. For example, by having a Will you are able to designate your personal representative, the person responsible for administering your estate. You are able to control who receives your assets and when. You are also able to designate who will be the guardian of minor children in the event something were to happen to both you and your spouse. In the absence of specification of your wishes by a Will, a court would have to make these types of decisions in reference to applicable laws and the court's discretion.
It is highly recommended that where there are minor children that a testamentary trust be used for the benefit of such children. A testamentary trust is a trust which does not come into being until the death of the decedent. The provisions of the trust are incorporated within the Will. Without the use of a testamentary trust a minor child could receive a large sum of money outright with no restrictions on its use. This may be unwise even for a child of the age of 25 who is not technically a minor.
The use of a testamentary trust allows the decedent to impose terms upon when the children will receive distributions from the trust outright. Prior to receiving such outright distributions, the trustee will make distributions to or on behalf of the child for the child's "health, education, support and maintenance." It is usually recommended that the children not receive outright distributions until they reach the age of 25 or 30. For example, the trust may provide that the child receives one-third of the corpus or principal at age 25, one-third at age 30, and one-third at age 35.