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Foundational Knowledge:
A Trust to Keep
Variety of estate planning tools available
By Angella Hjelle, Executive Director and Corporate Counsel of the Bethel Foundation
Q: What is a testamentary trust?
A: By definition, the word "testamentary" means relating to a will or testament. Therefore, a testamentary trust is a trust that is created by a person's will.
Q: Why would a person create a testamentary trust?
A: This is a common estate planning technique used to accomplish a host of objectives. As an example, the Bethel Foundation is the trustee of a trust that was established in a person's will to benefit his parents and ultimately Bethel. In this case, the son predeceased his parents, and the trust has been providing income to his parents for a number of years. As a matter of fact, the remaining income beneficiary of this trust, now 101 years old, is the oldest living person benefiting from a trust managed by the Foundation. She will continue to receive the income until her death, at which time the remaining assets of the trust revert to Bethel.
In another example, a person established a trust in his will to benefit his children and Bethel. This trust was funded at the death of the testator and will provide income to his children for a specified period of time. At the end of that term, the trust principal will benefit Bethel's mission.
Q: Is a testamentary trust something I should consider?
A: A testamentary trust is just one of many techniques that may be employed to accomplish your estate planning goals. Once your goals have been defined, various instruments may be used to accomplish them. The Bethel Foundation is here to help you achieve such goals.