Yes, a testamentary trust is created *within* a will and therefore initially goes through probate, but its assets do not remain *in* probate indefinitely.
What is Probate and Why Does it Matter?
Probate is the legal process of validating a will, identifying and inventorying the deceased’s assets, paying debts and taxes, and distributing the remaining assets to the beneficiaries. In California, probate can be a lengthy and expensive process – often taking anywhere from 6 months to 2 years, and costing 4-5% of the gross estate value. This is due to court fees, attorney fees, and potential creditor claims. Many people seek ways to avoid or minimize probate to ensure a quicker and more efficient transfer of assets to their loved ones. Approximately 60% of Americans don’t have a will, leading to even more complex and costly probate proceedings when they pass away. A testamentary trust is a tool that, while initially subject to probate, ultimately allows assets to bypass the full probate process for distribution to beneficiaries.
How Does a Testamentary Trust Differ from a Living Trust?
Unlike a living trust, which is created and funded during a person’s lifetime, a testamentary trust is established *within* a will and comes into effect *after* death. A living trust allows for immediate transfer of assets upon death, avoiding probate altogether. However, a testamentary trust’s assets are initially subject to probate as part of the overall estate. Once the will is validated and the probate process begins, the provisions for the testamentary trust are enacted. The trustee named in the will then steps in to manage the assets *held within the trust* according to the terms outlined in the trust document, and crucially, those assets are then distributed *outside* of the ongoing probate proceedings. This can be particularly beneficial when dealing with complex family situations or beneficiaries who may require ongoing asset management.
What Happened to Old Man Hemlock?
I remember a case involving a client, Old Man Hemlock, a kind but stubborn gentleman who refused to create a living trust. He insisted his will was sufficient. He had a substantial estate and several children with varying degrees of financial responsibility. He had a testamentary trust outlined in his will, intending to protect a portion of the inheritance for his youngest daughter, who struggled with managing money. Unfortunately, when Old Man Hemlock passed away, his will went through probate, as expected. But because the testamentary trust was part of the will, all the assets, even those *intended* for the trust, were initially subject to the probate process. The process was slowed down by a disgruntled son, who contested the will, and ultimately the estate lost a significant amount in legal fees and delays. It took over a year and a half to finally distribute the assets, even to the trust beneficiaries, and the delays caused considerable stress for everyone involved.
How Did the Millers Avoid a Similar Fate?
Then there were the Millers. They came to me wanting to ensure their children were provided for, but they were worried about one daughter’s ability to manage a large inheritance responsibly. We established a testamentary trust within their will, outlining specific distribution schedules and guidelines for the daughter’s portion of the estate. When the time came, their will went through probate, but the assets designated for the trust were quickly identified and transferred to the trustee named in the will. The trustee then managed those assets according to the terms of the trust, ensuring the daughter received support without losing control of the entire inheritance at once. This created a safety net, allowing the daughter to learn financial responsibility over time. It was seamless, and the entire probate process was completed in under eight months, far less than Old Man Hemlock’s protracted ordeal.
“Proper estate planning isn’t about death, it’s about life and ensuring your wishes are honored and your loved ones are protected.”
In conclusion, while a testamentary trust does initially go through probate as part of the will, its purpose is to ultimately bypass the full probate process for the assets it holds. This can be a valuable tool for providing ongoing asset management or protecting beneficiaries, but it’s essential to understand its limitations and compare it to other estate planning options like living trusts.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- living trust
- revocable living trust
- irrevocable trust
- family trust
- wills and trusts
- wills
- estate planning
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “What’s the difference between a will and a trust?” Or “What court handles probate matters?” or “Is a living trust suitable for a small estate? and even: “How does bankruptcy affect co-signers on loans?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.