A will can do more than name who receives your property. It can also create a trust that controls how and when a beneficiary receives assets. This arrangement, called a testamentary trust, can help someone provide an inheritance while keeping assets under management for a period of time.
How a testamentary trust works
A testamentary trust begins with a person’s will and takes effect after that person dies. The will describes the trust terms, names the trustee and explains how the trustee should manage or distribute the assets. Washington law allows a will to create a trust that takes effect at death.
The will generally goes through probate before the testamentary trust can operate. Once the trust takes effect, the trustee manages the property according to its terms. The trustee may make distributions to beneficiaries based on conditions or timing stated in the will.
This structure can provide continued management of an inheritance. Next, it helps to understand why someone might choose this arrangement.
When a testamentary trust may help
A testamentary trust may make sense when a person wants more control over an inheritance. Common reasons include:
- Providing assets to a child over time rather than all at once
- Allowing a trustee to manage property for a beneficiary who cannot manage it independently
- Setting conditions for when or how distributions occur
- Keeping an inheritance under trust management instead of giving it directly to a beneficiary
- Providing continued management of certain assets after death
The trust terms determine what the trustee can do and when beneficiaries receive property. Clear terms help the trustee understand and follow the creator’s wishes. Next, Washington law adds another layer to consider.
How Washington law applies
Washington law can govern a testamentary trust connected to a Washington probate proceeding. The location of the probate proceeding, trustee and trust property can also affect where trust matters receive attention. Understanding these details can help when deciding whether a testamentary trust fits an estate plan.
A testamentary trust can give a person more control over an inheritance after death. Its terms should match the person’s goals and clearly explain how the trustee should manage and distribute the assets.