What is a testamentary trust and how does it work?

A testamentary trust is an estate planning tool used in Virginia that provides for the management and distribution of assets and money upon the death of a grantor. It is created by a will and comes into effect only after the grantor’s death. A testamentary trust allows the grantor to control how their assets are used and distributed after they’re gone, including who will receive assets and how they will be managed or distributed. The grantor creates a trust document that details the specific terms of the trust. This includes who should receive assets (beneficiaries), when they should receive them and in what amounts, as well as how the assets should be invested and managed. The grantor also appoints a trustee, who is responsible for managing the trust assets and distributing them as directed in the trust. To create a testamentary trust in Virginia, the grantor must include specific language in their will. The trust must also be funded by the grantor’s assets in order to come into effect. Testamentary trusts are useful estate planning tools for those who want to control the management and distribution of their assets for years after their death. While they can be complex and require careful drafting, they can provide considerable protection for a grantor’s assets and provide assurance that their wishes will be followed.

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