I do a lot of estate planning work and often times a simple family trust is needed to appoint someone to manage finances on behalf of minor children. The decision to appoint someone to this position should be taken very seriously, because their mismanagement of funds could cause your children a serious financial loss. On the flip side your lack of direction to the Trustee could land them in some hot water.
Testamentary vs. Non-Testamentary Trusts
A testamentary trust is a directive by the Grantor(s)-the person or persons who ultimately die-, in their will, to someone to hold their estate in trust for their minor children. Some of my client’s will choose this less than satisfactory option to save expenses in the drafting of a separate, or non-testamentary trust. The problem with saving a little bit of money now is that your kids could lose a lot later. In a testamentary trust, the grantor loses the ability to set forth those specific distribution requirements that they can make in a non-testamentary trust. The specifications not only provide some protection of your estate for your kids, they also provide guidance to the Trustee in how to spend the money. Without proper guidance, the Trustee could unintentionally spend money that the Court would not consider reasonable and face citations and contempt charges, removal from their position, or worse case scenario even jail time.
The bottom line is this-if you don’t have any estate planning and you have minor children or you have a testamentary trust, its worth calling Dailey Law Offices today at 614-771-6000 for a free consultation.