The client can change a testamentary trust
at any time.
This can often be confusing to nontax specialists, who are generally aware of the need to name an estate or revocable trust but not a separate testamentary trust
formed under that instrument.
This is because the new rules provide that existing testamentary trusts
and estates that have existed for longer than 36 months and that have off-calendar yearends will have a deemed year-end as of Dec.
are established under a person's will and have no effect until the testator's death and the probate of the will.
Michigan taxes a testamentary trust
solely on the basis of a resident testator, and taxes a living trust on the basis of a resident settlor unless all beneficiaries, all trustees, and all administration of the trust takes place outside of the state.
For this reason, a testamentary trust
that qualifies for the marital deduction will be used.
When the second spouse dies, the will may then become the vehicle to transfer ownership of property, create a testamentary trust
, appoint a guardian, etc.
allow for various distribution schedules.
Most trusts will fall within three categories: life insurance trusts, charitable remainder trusts, and testamentary trusts
, he said.
Estates, testamentary trusts
and unincorporated businesses may have a non-calendar fiscal year-end (i.
In addition, the period that a testamentary trust
could hold shares would be extended.