Many people have heard about the term "trusts". Some
people may incorrectly believe that trusts are only for wealthy
individuals. In fact, trusts, and especially testamentary trusts,
are an important estate planning tool for a wide range of
A testamentary trust is a trust that is created under a Will
wherein the executor/trustee is directed to hold all or a portion
of the estate assets for a specified period of time and for
specified people (the "beneficiaries"). A testamentary
trust is only activated on the person's death.
As compared to leaving assets directly to the beneficiary under
a Will, leaving assets in a testamentary trust can offer a number
of benefits, including:
control over the timing and amount of distribution to
flexibility in structuring payments to beneficiaries;
protection of the estate assets from potential third party
claims against beneficiaries;
reduced probate fees, where applicable;
maintaining privacy; and
potential tax benefits.
Testamentary trusts are especially useful to deal with certain
family dilemmas. For instance, in a blended family, a person may
want to provide for his/her spouse during the spouse's
lifetime, but may also want his/her assets to eventually go to
his/her children. A testamentary spousal trust can be used to
support a spouse while protecting the ultimate interests of the
Our wealth preservation group can explore these advantages
further with you to develop an estate plan that would accommodate
your unique family circumstances.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).