What is a testamentary trust?

A testamentary trust is an estate planning tool created in a will. A testamentary trust is a legal entity created upon the death of an individual, often referred to as the “testator.” The trust holds title to property, and a Trustee is appointed to manage the assets for the benefit of the beneficiaries. The trust’s purpose is to provide for the orderly transfer of assets to designated beneficiaries in accordance with the testator’s wishes. In Florida, a testamentary trust can be created and become active on the testator’s death. The will should specify the type of trust being created, the Trustee, the beneficiaries, the trust’s term, and the trust’s purpose. Additionally, the will should provide the Trustee instructions and authority necessary to manage the trust assets. The Trustee has a fiduciary responsibility to manage the trust assets for the benefit of the beneficiaries. This means the Trustee must act in the beneficiaries’ best interest and avoid any conflicts of interest. The Trustee may make investments, incur expenses, and pay taxes on behalf of the trust. The Trustee must provide an accounting of all of the trust’s actions to the beneficiaries. A testamentary trust is an important estate planning tool that can provide a level of control over how estate assets are distributed after the testator’s death. Understanding the legal information and guidance needed to create a valid testamentary trust is important for individuals living in Florida.

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