What is a testamentary trust and how does it work?

A testamentary trust is a type of trust created by a person’s last will and testament, meaning it doesn’t take effect until after the person passes away. In California, the testamentary trust is usually used to manage the deceased’s assets and provide for beneficiaries, like children or other family members. The will identifies who will be the trustee of the trust, and how the assets should be managed. The will also identifies the beneficiaries of the trust. The trustee is responsible for managing the assets and making sure they are distributed as intended according to the terms of the trust. This could include distributing income to the beneficiaries, managing investments, and other activities. Once the trust takes effect, the trustee will collect the assets and manage them according to the terms of the will. The beneficiary can receive distributions from the trust according to the terms of the will, such as receiving a certain percentage of the trust’s assets in regular payments. The trustee is responsible for making sure the terms of the trust are faithfully followed, and for making sure all taxes due on the assets are paid. Testamentary trusts can provide a great way to make sure that the deceased’s assets are managed and distributed according to their wishes. They can also help with tax planning, since assets held in trust may be taxed at a lower rate than assets held by individuals. Testamentary trusts can be a very powerful tool in estate planning, and should be considered by those in California.

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What is a testamentary trust and how does it work?

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