For CPAs involved in trust compliance and planning, the key step when any testamentary trust
is formed is to have a meeting with the trustee and trust counsel to review the trust and how it should be operated.
Does your will create a testamentary trust
to benefit your spouse, common-law partner or children?
are established under a person's will and have no effect until the testator's death and the probate of the will.
All states that tax the income of trusts base their jurisdiction to tax resident trusts on a combination of one or more of the following factors: 1) residence of the testator of the trust at death for a testamentary trust
(resident testator), or residence of the settlor at the time the trust becomes irrevocable for a living trust (resident settlor); 2) residence of the trustee; 3) place of administration; or 4) residence of the beneficiaries.
While living wills are set up during a person's lifetime, another instrument called a testamentary trust
is established through a will upon an individual's death.
[section]732.603 with regard to testamentary trusts
Total Affluent: Households with $100,000 + income and/or net worth of $500,000, excluding principal residence Any Trust Account 36% Revocable Living Trust 21% Testamentary Trust
15% Insurance-Funded Trust 8% Charitable Trust 5% Other Trusts 8% Custody Account 5% Wealth: Households with $1 million+ in investible assets Any Trust Account 59% Revocable Living Trust 37% Testamentary Trust
7% Insurance-Funded Trust 17% Charitable Trust 9% Other Trusts 15% Custody Account 9% Source: Spectrem Group, 1999
The due date for the election would be April 30, 1996 for the individual proprietor of the unincorporated business, or 90 days after the fiscal year-end for an estate or testamentary trust
. With unincorporated businesses, this exception is limited to "eligible capital property" of the business, such as goodwill or customer lists.
* AMONG THE COMMON ESTATE PLANNING techniques are testamentary trusts
, asset transfers to younger generations, life insurance trusts, family partnerships and estate freezes.
, on the other hand, are established at death; they spring out of the last will and testament.
(Only Section 678 trusts, certain grantor trusts, certain testamentary trusts
and trusts that meet the definition of a qualified sub-chapter S trust are permitted to hold S corporation stock.)
For estate planners, the simplicity of testamentary trusts
makes them ideal for younger clients.